Geoffrey Clifton-Brown: I wish to draw attention to a case of which I gave the Minister prior notice—that of Mrs. Sonia Poulton, who lives in Cirencester. The case dates back as far as June 2001. I finally referred it to the independent case examiner in August 2004 after protracted correspondence. A year later, in August 2005, the examiner ruled that there were serious shortcomings in the way in which the CSA had handled the case, that compensation was to be paid for the £5,100 arrears, and that an apology should be given.Since then, the CSA has prevaricated. It has changed its mind about what the compensation should be with a stroke of the pen on numerous occasions, sometimes to the tune of many thousands of pounds.
	I re-referred the case to the independent case examiner, and heard from her on 31 January 2006. Her letter stated:
	"I regret that I cannot take matters forward without giving the Agency a chance to resolve matters."
	This case is dreadful. It needs to be resolved. The CSA is out of control, with no effective right of appeal. Will the Minister look into the matter personally, so that my constituent can receive the proper justice that she deserves?

John Hutton: No, there will not be any gimmicks. We need to see a significant improvement in the CSA's performance on enforcement. On driving licences, it is worth bearing it in mind that sometimes, the threat of such a sanction can have the desired effect, so if I were the hon. Gentleman, I would not place too much emphasis on the instances in which that threat has been carried out.

Philip Hammond: Indeed it is totally unacceptable, but it was not clear from the Secretary of State's response whether he accepts the Government's responsibility for this epic tale of managerial failure. Does he accept that the Government are responsible for what has happened in the CSA and the suffering caused to so many families by it? If he cannot assure the House of any early migration of the old rules cases to the new system, would he at least act—in the interests of fairness—to extend the £10 per week child maintenance premium to parents in receipt of those old rules payments?

Anne McGuire: I thank my hon. Friend for the question—she has taken every bit as active an interest in the situation at Fylde as the hon. Member for Lancaster and Wyre (Mr. Wallace), who asked the primary question—but I trust that hon. Members will not assume that, because jobs are declared surplus, there will be redundancies. In fact, I repeat that there have been no compulsory redundancies on the Fylde coast.

Anne McGuire: I am sure that the hon. Gentleman will not mind me reminding him that, if we had implemented the James report, which the Conservative party introduced, even more cuts would have been made. We have achieved a reduction of 14,000 full-time equivalent jobs, and we are continuing to place the emphasis on our staff delivering for our customers. May I correct just one part of the hon. Gentleman's question that is inaccurate? In fact, the CSA has seen an increase in staff over the past few months.

Lindsay Hoyle: If he will make a statement on the decision not to renew the contract with the Royal Mail for the post office card account.

Lindsay Hoyle: I hear the Minister's view, but mine is slightly different. I do not recall that the account was to be temporary. We were told there was a 10-year contract that could be rolled over beyond that. That was the emphasis given when the account began. Will the Minister reconsider his position? Pensioners throughout the country depend heavily on the Post Office to access their money. Please do not put them at risk. Please reconsider. The whole House will agree that it is important that pensioners have easy access to their money.

David Winnick: I agree with my right hon. Friend. I am against the cartoons, but is it not entirely unacceptable for a bunch of hooligans and thugs in London to demand that people be beheaded and to glorify the atrocities of 7 July and call for further such atrocities to be committed in Britain? Is that not a clear case of incitement to murder? Indeed, it is a deep insult to those who lost their loved ones in the July atrocities and to the others who survived but who will suffer the consequences of their serious injuries for the rest of their lives.
	Have not mainstream Muslim organisations made it perfectly clear that those hooligans are not representative of members of the Muslim faith and that they dissociate themselves from them? They have made it clear, as I do, and as I hope most people do, that legal action should be taken. Should not a message go out from the House that we should never again on British soil see the kind of slogans and incitement to murder that disgraced this country last Friday?

Alistair Carmichael: I accept what the Home Secretary says about the operational nature of many decisions taken about Friday's demonstration, but does he accept that the House deserves to be told in the fullness of time the reasons for those decisions and the level at which they were taken? Were they taken as a result of a policy decision, or taken at ground level by the senior officer in charge of policing the demonstration? Will the Home Secretary undertake to inform the House of those matters at the earliest available opportunity?
	It is accepted that many of those who were quick to criticise the police for making no arrests at the weekend would doubtless have been even to quicker to criticise if arrests had been made that inflamed a highly volatile situation. Does the Home Secretary accept that it is essential that there is a full inquiry and that prosecutions follow, provided there is sufficient evidence to justify them and that the CPS and, perhaps, the Attorney-General feel that that is in the public interest?
	Finally, do not these events illustrate the wisdom of the position taken by this House last week on the Racial and Religious Hatred Bill? The decision by these newspapers to publish the cartoons was almost certainly unwise, but it should never have been made illegal.

Charles Clarke: I agree. Perhaps I should reinforce the point that I made earlier: the leadership of all parts of the Muslim community has expressed exactly the sentiments set out by my hon. Friend. I do not need to call the leaders of the Muslim community in to make that point because they have been doing so, and I am confident that they will continue to do so very strongly.
	Perhaps I can make one other point in response to the question. My hon. Friend is right to identify the fact that there are forces in this country, including within the Muslim community, who seek to weaken and damage the democratic fabric of our society. That is why the Terrorism Bill that is now before Parliament contains proposals on proscription of certain organisations that set out to do that. We are widening the criteria for proscription precisely to address the point that my hon. Friend makes, and I hope that those considerations, too, will have the support of the House when we come to look at the Terrorism Bill in the round.

Charles Clarke: It is for that reason that I made remarks in my initial statement supporting the Danish Government against the attacks that they are experiencing from a number of countries. Yes, I have talked about the matter with colleagues in the Foreign Office, and, yes, I can give the House the assurance that strong representations are being made in the direction to which the right hon. Gentleman referred.

Dennis Skinner: The Home Secretary keeps referring to the fact that the police have certain duties and that he has certain duties, and that ne'er the twain shall meet. Why is there one set of rules for those who engage in a holy war, while there is quite another for those who engage in a class war, such as the miners' strike of 1984–85? That highly volatile situation lasted for a whole year, and 7,000 miners were arrested, some only for shouting, "Scab!" Why do the police have one set of rules for them, and another set for others? During that period, not one Tory Minister condemned the police for their actions.

Douglas Hogg: The conduct of most, of many, of the demonstrators was pretty atrocious, but should we not be very careful about invoking criminal law? After all, most of the relevant offences, particularly incitement, require specific intent. That is different in kind from hot-headed and unpleasant rhetoric. The truth is, surely, that in a democracy we have to put up with a great deal that we dislike and of which we disapprove, and in general we should not invoke the criminal law. Failed prosecutions, after all, tend to be extremely counterproductive.

Harriet Harman: With permission, I shall make a statement on reform of the coroner service.
	The coroner system is of great importance. When someone dies a violent or sudden death, when the cause of death is not certain or when the identity of a body is not known, there must, in the public interest, be a proper inquiry, and the bereaved relatives need to know what happened and why.
	Coroners, and the officers who support them, deal with cases that are always sad and often tragic. That was exemplified most recently in the work of the three coroners and their staff who dealt so sensitively and expeditiously with co-ordination of the identification process in the tragic aftermath of the 7 July London bombings. I pay tribute to coroners and their staff, and acknowledge the difficult and important work that they do.
	The service contains many coroners and staff who are dedicated and committed, but I think we all believe that the system within which they do their work could be much, much better.
	There has been long-standing interest in and concern about the coroner service in this House, because all Members have constituents who involved them in cases that ended up in the coroner's court. I am sure that we all want a coroner service that enables committed coroners and their officers to ensure that the public interest is served in all inquests in every part of the country, and which enables bereaved relatives to have their answers; that is not the case at the moment.
	Under the current coroner service, families frequently get overlooked during the inquest process. There is nowhere for them to turn when they think that something is going wrong; there is no complaints system. The system is fragmented, with no national leadership, and it is not accountable. We have no overview of the system as a whole, or of individual cases. Moreover, the system is not properly accountable to this House, which it should be. Standards are not uniformly good; everything rests too much on the personal qualities and abilities of individuals within the system. The legal framework is downright archaic. For most coroners, this is not even their principal occupation; it is a secondary one, added on to their main work as solicitors in private practice. Most coroner's officers have to learn on the job as they handle the most technically complex and personally difficult cases, with no systematic training. That is not fair on relatives or on the coroner's officers themselves.
	The coroner service must serve the public interest and meet bereaved families' concerns in a way that, frankly, it currently does not. That is what these proposals aim to achieve and through them, we will do three things. First, we will put a proper focus on bereaved families and give them a clear legal standing in the system. We will set out the way in which the system should deal with families. We will give them the right to ask the coroner for a second opinion on a death, and to challenge coroners' rulings on how the investigation and inquest is run, and we will establish a complaints system.
	Secondly, we will strengthen coroners' work. There will be a proper system for appointing coroners, and all will have to be legally qualified. Moreover, the role of coroner will have to be their only job. They will have a clear power to investigate a death, even where a certificate has been issued, and they will have additional powers to obtain evidence for their investigations. Dedicated medical advice will be available to them, and there will be an end to archaic boundary restrictions, which cause unnecessary difficulties when major incidents occur or when specialised examinations need carrying out.
	Thirdly, we will establish a national framework for coroners' work. For the first time, there will be a chief coroner, who will give leadership to coroners in the same way as the Lord Chief Justice does to judges. There will be a coronial advisory council, a system of inspection and a national training system for coroners and their officers.
	The question of a second certification of a death was a key issue in the third report of Dame Janet Smith into the Shipman murders. The Government have continued to examine the proposal that every death in England and Wales—some 500,000 a year—should have additional medical scrutiny by the coroner service. The coroner reforms that I am announcing to the House today do not stand alone. They will be complemented by further work being taken forward in the Department of Health, which is aimed at improving patient safety and promoting quality in the NHS.
	We need a system that can identify and investigate suspicious deaths, but which allows families to proceed quickly with funeral arrangements where there is no cause for concern. We are not sure that the proposal to have all deaths referred to coroners achieves that, but we will continue to look at this issue and we are not ruling out the possibility of further reform.
	I should like to thank both Dame Janet Smith and Tom Luce for their work, and to thank the voluntary organisations who have advised me from the viewpoint of bereaved families. I have placed a background note in the House of Commons Vote Office and in the Libraries of both Houses. It gives more detail on the measures that I have announced today, and it shows how we have built on the work of Dame Janet and Mr. Luce. We intend to proceed by way of a draft Coroners Bill this spring to enable pre-legislative scrutiny, probably by the Constitutional Affairs Select Committee. In parallel with such scrutiny, I intend to arrange a separate strand of pre-legislative scrutiny that will greatly help to inform the House. This will consist of pre-legislative scrutiny by families who have recent experience of the coroner service. I commend these proposals to the House.

Jonathan Djanogly: Coroner's courts are, as the Minister said, undoubtedly a very important issue. In the context of Harold Shipman, the Hatfield rail crash and the more recent example, which she mentioned, of the July bombings, effective coroner's courts and the investigation of death are highly sensitive issues. Alongside the registration of deaths, coroner's courts should provide a reliable system for collecting data on deaths and monitoring trends in deaths. They should provide appropriate investigation into suspicious deaths in order to uncover wrongdoing and offer a thorough and sensitive service for relatives of those who die suddenly and unexpectedly.
	However, they also need to provide for large cases, in relation to which capacity has been an issue. Will the Minister explain how the proposed system would have helped the investigation of the deaths of Harold Shipman's patients and those who suffered in Hatfield, the types of inquest where picking up patterns of behaviour is needed and capacity has been a problem?
	Reform of the coroner and death certification service has been under consideration for some time and it is about time that an effective system was put in place by the Government. The Luce report concluded that the system was not fit for purpose in modern society. The Government's position paper, published in March 2004 following the review by Tom Luce and the Shipman inquiry in the summer of 2003, has left us waiting for some form of Government action for nearly two years. The Government have acknowledged the need to avoid long delays to inquests into deaths in custody and the need for reform in general. Although today's statement is welcome, what, may I ask, has been happening all this time when the Government have been saying for years that legislation is on its way, if not imminent?
	I make no judgment, as the Minister did not, on the 120 or so coroners, their support staff and investigators. I would point out, however, that the statutory powers and procedures under which they work were established in a different era. The Shipman inquiry described a situation in which coroners work from home, where there is virtually no training, and any training that is available is not compulsory.
	The Government's position paper published in March last year made some good recommendations, which were reflected in the Minister's statement; a system based on full-time coroners with legal qualifications, closely supported by appropriate medical expertise, together with tighter rules for death certification, notification of all deaths to coroners and stronger support for scrutinising cases and investigation where necessary. However, will the proposed new system allow for judges to sit as coroners when required, as recommended by the Hatfield inquest?
	Dealing with death will always be, and should always be, a sensitive issue that requires and deserves efficiency, speed of process and accuracy. The reform of the coroner's court system to deliver those objectives is long outstanding. To that extent, the Government's proposals are generally welcome, although there is a clear need for careful review of the proposals, which are light on detail so far. We welcome the Government's offer and suggestion of pre-legislative scrutiny. Will that take place in the spring? I think that is what the Minister implied.
	Finally, I note that parallel scrutiny is proposed by families who are experienced in the process. That is welcome, but will it take place before parliamentary scrutiny so that the House can have the benefit of its findings?

Harriet Harman: I thank my hon. Friend for her welcome for the proposals. I, too, acknowledge the concern felt by our hon. Friends the Under-Secretary of State for Culture, Media and Sport and the Under-Secretary of State for the Home Department, the Member for Wythenshawe and Sale, East (Paul Goggins). I have held a number of discussions with them and they have urged me and the Minister of State, Department of Health, my right hon. Friend the Member for Liverpool, Wavertree (Jane Kennedy) to meet the relatives of those who suffered at the hands of Harold Shipman to ensure that they play a part, by looking at the proposals and giving us the benefit of their too terrible experience.
	My hon. Friend the Member for Calder Valley made a proposal about cremation forms. I see no reason at all why relatives, or anybody with a justified interest, should not see cremation forms. That is a practical proposal. A simple leaflet, which could be a summary of the family charter, would be extremely worthwhile, and we shall ensure that every family involved has not only the benefit of the rights of the new charter for families, but a summary of it.
	My hon. Friend talked about empowerment for bereaved relatives. One of the problems has been that there is nothing that relatives can do when the system goes wrong except wait until the end of the process and go to the High Court to ask for the inquest to be overturned. They cannot challenge whether an inquest should be held, whether a jury should be empanelled or which witnesses should be called. In the Bill, we will put in place the opportunity for relatives to ask the chief coroner to review the case so that it can be remitted back to the coroner with an instruction from the chief coroner. We do not want to leave it until the end of the process, when things might have gone wrong, to require people to go to the High Court. Early intervention is needed to make it possible for relatives to have their say at an earlier stage.

David Heath: I am grateful to the Minister of State for early sight of her statement. May I gently tell her, as she recognises the delay, that the March 2004 paper said:
	"We do not intend to conduct a further period of public consultation, which could lead to unnecessary delay to this process of reform."?
	That, in itself, was two years ago, so there is a need for some expedition, but the reforms that she announces are entirely welcome. I am particularly pleased to see the focus on the bereaved, which is right. May I ask her a number of questions?
	First, will the right hon. and learned Lady retain the local jurisdiction of coroners? I think that she implied that she would do so in answer to an earlier question, but it is important that coroner's courts be accessible to people, particularly in the circumstances of the death of a loved one. If that is the case, will there be a special arrangement—again, she implied this—for national disasters, such as the sort of thing that we saw on 7 July or previously with the Marchioness disaster, which allows not only a specialist coroner but the ancillary technical and scientific support to enable those matters to be investigated with expedition?
	The right hon. and learned Lady mentioned archaic boundary restrictions. Can anything be done to stop difficulties when crossing national boundaries, both in the United Kingdom and in our relations with overseas jurisdictions? The proposal that all coroners should now have legal training is welcome, but does she recognise that they need to have at least an understanding of the vocabulary of science and to understand some quite technical matters? It is not good enough simply to be a lawyer nowadays; to an extent one must be a polymath.
	Is there still a dearth of pathologists, particularly paediatric pathologists, in forensic work? If so, what is being done to address that? Will coroner's juries be retained? Will coroners' guidance be binding on public authorities? At the moment, coroners often make statements to public authorities, but there is no requirement for them to consider those recommendations. Will there be such a requirement in future?
	Lastly, this is perhaps a minor matter, but what used to known as treasure trove is an historical remnant of coroners' jurisdictions. Would it not be better to place that—though perhaps within a judicial process—in the Department for Culture, Media and Sport? I look forward to swift progress on the proposals, and the right hon. and learned Lady will have every support from Liberal Democrat Members in making swift progress.

Harriet Harman: I thank the hon. Gentleman for making a number of important points. First, treasure trove is an ancient jurisdiction of coroners. Sometimes, such cases can take two to three years to resolve, because treasure trove is always put at the back of the queue and dealt with locally. That does not make sense. We will make one coroner nationally responsible for treasure trove and get that dealt with effectively.
	The hon. Gentleman asks whether public authorities will take notice of coroners when they make a statement about what lessons they think should be learned after a death. The higher public profile and higher national standing of the coroner service that Dame Janet Smith thought so important—we certainly agree—will ensure that public authorities are not able perhaps to leave on one side proposals made by a much better respected coroners system. Yes, there will still be coroner's juries. In addition to the mandatory cases where coroner's juries are required, coroners will have the discretion to use juries.
	The hon. Gentleman asks whether coroners will have training, particularly in medicine and health issues. They will be qualified lawyers. All of them will have training, including medical training. In addition, they will have their own dedicated health advice, which they do not have at the moment. That will be part of a central budget which will be given to each and every coroner so that they have dedicated health support for medical issues. There is a dearth of pathologists, which also concerns colleagues in the Department of Health and the Home Office.
	On foreign deaths, it is particularly distressing for bereaved relatives who have involved themselves in a full inquest in, say, France or Spain, to come back to this country and go through the process all over again. We plan to end that. If there has been a satisfactory inquest, albeit abroad, it does not have to be repeated.
	Coroners will have a local jurisdiction and will be accessible. There will be fewer coroners, however, because they will be full-time. It will be their dedicated job and they will be professional coroners, so there will be fewer of them.
	As far as national disasters are concerned, it is ridiculous to expect a fragmented local general service to deal with major national emergencies or disasters. It is not fair on the coroner's officers, the coroners and, above all, the relatives. Our proposals will enable that to be handled effectively.
	I can only agree with the hon. Gentleman on timing. I have perhaps waited longer than most other hon. Members for this to happen because I first went on record as complaining about the problem 30 years ago. We have all waited a long time. Let me explain the timing because I was possibly not clear about that in response to my hon. Friend the Member for Calder Valley (Chris McCafferty). We expect to put the draft Bill before the House in April or May. We expect to have the Bill proper available for the scrutiny of the House in November or December.
	I perhaps did not answer the question of the hon. Member for Huntingdon (Mr. Djanogly) about family scrutiny. I expect that to take place in the House so that colleagues who intend to involve themselves in the debate on Second Reading and in Committee can see a moderated discussion by people who have practical and recent experience. It will make for a much more sensible debate if we have that running alongside the Select Committee's important work.

Jon Trickett: I unreservedly welcome my right hon. and learned Friend's statement. I speak on behalf of the family of my constituent, Sean Hutchinson, whose body was left in a coroner's morgue for more than two years while the coroner's officers failed to discover his identity, leaving the family in a state of great distress, not knowing whether he was alive or dead. In subsequent conversations with coroners, I have come to the view that they are one of the remaining unreformed relics of feudalism; unaccountable, unmanaged and often arrogant. Will she press ahead with absolute urgency to bring comfort to families in the future?

Humfrey Malins: I commend to the Minister the work of the Surrey coroner, Mr. Michael Burgess, and his excellent deputy Mr. Nick Benger. Their problems over the past few years have been essentially practical; shortage of staff, IT problems, shortage of coroners offices and difficulty in finding a place fit for a jury where an inquest can be held. Will the Minister ensure that her reforms address some of the practical problems faced by that excellent coroner and his deputy?

Harriet Harman: I thank the hon. Gentleman for his comments about the Surrey coroner and his deputy. He has described the problems of a service which has been affected by blight. Everyone has been so expecting something to change that it has been very difficult for coroners and officers to have any certainty for the future. I hope that, as from this statement, there will be an end to the blight and that we can support much better the work of the many dedicated coroners officers. I pay tribute to the Coroners Officers Association, which throughout the years of blight has tried to improve professionalism with precious little support. I hope that those things will be sorted out.

Harriet Harman: The hon. Gentleman has raised this on a number of occasions and it is of great concern. When we get rid of the boundary restrictions—coroners cannot sit outside their jurisdiction and are prevent from working where there is a backlog—that problem will be easily solved, but I do not expect people in the circumstances that he described to wait until we have legislated on that. We must address ourselves anew to do what we can within the current creaking system to sort out that situation.

Vera Baird: May I strongly welcome the proposals for proper appointments, training and discipline for coroners? The people of Teesside have long suffered under a part-time coroner, now aged 76, who has never seen the need to acquire any administrative skills or management experience, and has often had a backlog of 200 or 300 cases over six months old. All the MPs in the area have witnessed people crying at their surgeries because they are quite unable to grieve while waiting two, three or four years for an inquest to understand what happened to their loved one. Can my right hon. and learned Friend give me an absolute assurance that the proposals will guarantee that my constituents and those of my hon. Friend the Member for Stockton, South (Ms Taylor), who has mentioned the problem, will never suffer again under what is, after all, a public service?

Harriet Harman: We expect that there will be more than one coroner in cities. There will be at least one coroner in every county, and usually more than one, depending on the population. I cannot give a specific answer, but I accept the point that the hon. Gentleman has made. Coroners have mediaeval jurisdictions, which they control—no one else is allowed to sit there, and they are not allowed to sit in anyone else's jurisdiction—so it is impossible to do something simple and straightforward such as re-allocating a coroner to another jurisdiction to deal with a backlog. That is the problem with the statutory legal framework, and it is a simple but important thing that we will change.

Philip Hollobone: Currently, I am spending time on the parliamentary police scheme and have been out on patrol with the Kettering police, who operate a shift system. Is the Minister aware that, although it is true that police numbers, certainly in Northamptonshire, are at record levels, only one officer out of nine on a shift in Kettering was capable of driving a police car with the sirens and lights flashing? He was the only grade-one qualified police officer on that shift. Police numbers might be at record levels, but sadly, due to budget shortfalls, not all the officers are trained to the standards that the public would expect.

Paul Goggins: I pay tribute to the hon. Gentleman for his taking part in the parliamentary police scheme. Hon. Members of all parties engage with it, and that is a very effective way of showing support for the police service as well as of learning about some of the challenges that it faces.
	Clearly, I cannot comment on the particular circumstances that the hon. Gentleman described. However, the important thing is that those who manage our front-line police services should be able to bring together an appropriate mix of qualifications, professional experience and so on, so that we get the best policing possible in our local communities.
	In addition to increasing the numbers, we are actively reducing bureaucracy through a programme that we expect will yield the equivalent of an extra 12,000 police officers by 2008. Again, that will free up more police officers for the front line. Police officers are now supported by more than 6,300 community support officers, whose numbers are expected to increase by about 5,600 next year. That will take us to nearly 12,000—about half the total number of community support officers that we have pledged to deliver by 2008.

Paul Goggins: I am sure that the hon. Gentleman will understand that I cannot predict in fine detail how community support officers will be funded in 2008–09 because those years are in a spending period for which we do not yet have the details. He will understand from the explanation that I offer now that funding police services is, in essence, a balance between central funding and local funding—through specific grants, general grants and so on.
	As community support officers become firmly embedded in front-line policing, the funding of those officers will reflect that balance, as the hon. Gentleman and all of us would expect. How that balance will be achieved is a matter for further deliberation and no doubt further debate. However, beyond debate is the fact that community support officers, as the hon. Gentleman says, add enormously to the capacity of neighbourhood policing and to the reassurance of our constituents, and they will do so in even greater numbers in the years ahead.

Jim Cunningham: Last week, I said to the Home Secretary—and I briefly say to the Minister—that one of our difficulties in Coventry and the west midlands is in being able to contact police or a senior police officer during the weekends, particularly in the summer when all sorts of problems go on in our neighbourhoods. Will the Minister say, or give an indication of, how many community police support officers will be introduced in, for example, Coventry and the west midlands as a whole?

Paul Goggins: I am happy to pay tribute to Sussex police for its work, both in its financial administration and in front-line policing. It achieved impressive efficiency savings for the current year, and the expectation is that it will make further efficiencies next year. That expectation is not unusual now in any public service. There is an expectation of an ongoing search for efficiencies that can feed back in additional cash for the front-line services that we want more of.
	For the first time, this year, the Government have provided planning totals for two years. I shall set out the police funding settlement for 2006–07. The figures for 2007–08 were set out as part of the provisional settlement announced and made on 31 January, and will be finalised next year. The settlement will support our key policing priorities published in the national community safety plan: reducing overall crime; bringing more offenders to justice; providing dedicated, visible, accessible and responsive neighbourhood police teams; tackling serious and organised crime, including improved intelligence and information sharing between partners; and protecting the country from both terrorism and domestic terrorism.
	The total provision for policing grants and central provision in 2006–07 will be £10.574 million, an overall increase of 5.1 per cent. on the previous year. Most of this provision—some £7.372 million—is for the police general grant, which increases by 3.3 per cent. This allows us to provide a broadly flat-rate grant increase of 3.1 per cent.

Paul Goggins: What matters is that the right hon. Gentleman's constituents, my constituents and all our constituents have effective policing. What does that mean? It means policing that can cope with the threats of terrorism and organised crime—as well, of course, as providing neighbourhood policing. As I have acknowledged, as we bring authorities together, there will be different levels of precept. There needs to be a process by which those precept levels are merged into one level, but over a period of time. I can reassure the right hon. Gentleman that my right hon. Friend the Home Secretary has established a working group to look at the fine detail of that process, to ensure that it is used fairly and not as a blunt instrument, which would clearly be unfair. Officials are working on the details, which will be shared with him and other Members as and when such information becomes available.
	The significant development in the threat from international terrorism and the consequent increase in the funding of counter-terrorism in recent years has led us to focus on the best way of ensuring effective funding for this vital work. Following consultation, we decided to consolidate existing funding streams for countering terrorism and domestic extremism, which were a mix of specific grants and general grant. Following consultation with key stakeholders, including ACPO, we have created a new specific grant for counter-terrorism and other national security priorities. The counter-terrorism fund comprises £213 million for dedicated security posts, which is transferred from police grant; existing specific grants for counter-terrorism, totalling £96 million in resource and £8 million in capital each year; and the transfer of £50 million from formula grant to specific grant for the relevant part of the special funding for the Metropolitan Police Authority. In addition, on 25 January the Home Secretary announced substantial additional police service funding specifically for counter-terrorism and dealing with domestic extremism. This comes to some £63 million in revenue and £30 million in capital in 2006–07, rising to £110 million in revenue and £35 million in capital in 2007–08.
	In drawing my remarks to a conclusion, I would like to mention a number of additional points about the overall police funding settlement for 2006–07. For several years, the Home Secretary has provided additional funding to ensure that Welsh police authorities receive at least a minimum grant increase in line with English authorities. For the coming two years, we have adjusted the Home Office police grant for Welsh police authorities to maintain consistency with the English. That additional support will total £9.3 million next year for Dyfed-Powys, Gwent and North Wales police authorities.
	Police authorities will continue to receive funding for specific programmes on top of the general grant. We have tried to minimise the specific grant, thereby maximising the general grant so that police authorities can direct funds at their discretion, but there are still a number of areas in which we want to highlight particular funds. The crime fighting fund was mentioned earlier, and £277 million will be made available to forces in 2006–07 to continue to support the costs of officers recruited through the CFF. A number of forces have asked for greater flexibility, and that fund has been extremely successful in reversing the previous decline in the number of police officers. Strength has grown to historically high levels, we have invested heavily over the past few years to support that growth, and we remain committed to maintaining high numbers.
	Neighbourhood policing teams will be rolled out across the country over the next two years and uniformed police officers will play an increasingly key role in those teams. Through the front-line policing measure, we expect to see more of them released from back-office duties into front-line operation as we reduce levels of bureaucracy and put the freed up resource on to the front line. Forces should, of course, determine the right mix of personnel for their own work force. Decisions on police officer strength should be taken by authorities, not by the Government. There will be greater flexibility for most forces during 2005–06 and we look forward to seeing what further flexibility can be offered in 2006–07.
	Most of the funding for community support officers will come from the neighbourhood policing fund. In the year of recruitment it will meet 100 per cent. of salary and direct costs, subject to a cap, and a fixed sum of £2,500 per recruit will also be payable towards start-up costs. Thereafter, funding will be at 75 per cent., and with such support we expect CSO numbers to reach 24,000 in 2008.
	Some authorities have expressed concern about having to find some of the funding required for their CSOs, but the Home Office should not be the only source of funding. Community safety is an outcome shared with many partners; other central funding streams, local government, business and other organisations all have an interest. We shall shortly publish some guidance and examples of good practice to help authorities to secure match funding, and any surplus resources secured in this way may be spent as the force sees fit, so long as they are spent on neighbourhood policing.

Nick Herbert: That analysis is absolutely correct. In the absence of the Government funding the costs of amalgamation, only two things are possible: either the police precept must increase or services must be cut. As the Government are saying that the precept cannot be increased—it will be capped—the result is that front-line services will be cut, unless new funding is provided to meet those costs.
	As we pointed out last week, the Association of Police Authorities has quantified the cost of amalgamations at £525 million, based on the detailed calculations of each police authority. After the Home Secretary's provision of £125 million, that leaves a gap of £400 million, as was made clear by my hon. Friend the Member for Lichfield. The Home Secretary is providing less than a quarter of the amount needed to fund amalgamation. How will that be financed? Either more than two thirds of the entire capital provision for police forces, which the Minister has just announced, will be spent on amalgamations or, once again, local taxpayers must foot the bill.
	The Minister has said that police authorities can finance amalgamations with prudent borrowing. We might have expected that suggestion. The Government are not exactly averse to borrowing, however imprudent doing so might be, but whether or not authorities borrow the cost will be met ultimately by local taxpayers. Assuming that police authorities do not cut services, the average police precept would rise by 21 per cent. to fund the amalgamations. That would involve rises of between £15 and £37 on the average council tax bill on a band D property. That comes on top of already planned increases, which we will no doubt hear about later.

Nick Herbert: Again, my hon. Friend is right. The areas created by some of the regional forces are huge— some thousands of square miles—which raises serious issues of accountability as well as adding to the difficulty in forces of deploying officers across such vast areas.
	Two weeks ago the Prime Minister said that it was
	"not a question of forcing"—[Official Report, 25 January 2006; Vol. 441, c. 1426.]—
	amalgamations through, yet the Home Secretary has dismissed out of hand the cheaper and less disruptive option of forces sharing services, in spite of the fact that that has been supported by the Association of Police Authorities and endorsed by the Prime Minister. The Minister mentioned the savings that could accrue through amalgamation, but he will know that the O'Connor report estimated that at only £70 million a year, and there were no supporting calculations to indicate how those savings might be arrived at.
	The fact that North Wales police are not being allowed to consider merging with an English force, even though crime patterns would dictate that option, betrays the Government's true regional political agenda. The creation of a west midlands force announced in the statement today is not a merger at all. It is a hostile takeover of West Mercia police, which is one of the top-ranked forces in the country and wants to stand alone.
	Before the effect of the amalgamations was taken into account, the Association of Police Authorities and ACPO expressed concern about the levels of funding being provided, as announced today. They estimate a revenue gap of £250 million. That is based on detailed research carried out by police authority treasurers, which shows that the service needs annual funding increases of at least 6 per cent. in 2006–07 and 2007–08, excluding any new costs of dealing with counter-terrorism, which the whole House would support, and police force amalgamations. The Association of Police Authorities and ACPO identified the cost pressures in a joint statement as follows:
	"The need to maintain the high number of police officers; pay inflation; burdens imposed by new legislation and Government initiatives; anti-terrorism costs; new statutory and policy responsibilities for the police; and delivering police reform, including the neighbourhood policing initiative, which will bring with it very significant costs".
	Dr. Tim Brain, the chief constable of Gloucestershire and chairman of ACPO's financial committee, said:
	"Some authorities may face some real difficulties next year. Many Police Authorities held down council tax increases last year, by using their reserves. They will be under pressure to hold down council tax rises again, but this year they will have far smaller reserves upon which to draw. The level of reserves left available may not be sufficient to cover the gap that is emerging.
	The Government's intention is for average council tax increases to be limited to less than 5 per cent. otherwise 'capping' action may be taken. This will seriously affect the options available to bridge the funding gap and severe cuts in service look possible. Unlike other branches of local government, we do not have the option of off setting grant by increasing fees and charges for specific services. Some Police Authorities are going to be faced with difficult choices, and for some cuts in service levels may be the only outcome."
	Police forces have already made significant efficiency gains and, indeed, they have been congratulated by the Chancellor on leading the way. However, the comments of the chief constable of Gloucestershire have been echoed across the country, as the Minister will know, by a number of police forces and authorities that are concerned about the settlement. My own authority of Sussex said:
	"Sussex police authority's deeply disappointing . . . grant settlement, finalised last month, means that hard choices are required if the level of council tax is to be within the average 5 per cent. capping limits that have now been set by Ministers. Given the current funding, it will be increasingly difficult to set low council tax increases without impacting on front-line services."
	That was echoed by the deputy chief constable of Sussex, who will shortly become chief constable:
	"We have already planned to deliver some £6.8 million of efficiency savings in 2006–07 and 2007–08, but the final settlement will require further savings of £1.9 million in order to constrain the necessary precept increase below 5 per cent."
	Despite rightly making the savings that the Government have urged them to make, police authorities and forces still face financial difficulties.
	Lincolnshire police authority's treasurer and clerk, Mr. Roger Buttery, said that the force is facing a £4 million shortfall and may have to make some police staff redundant. If that happened, police officers would have to fill staff positions. Mr. Buttery told the Police Review that the authority was considering completing only emergency property maintenance and might have to pull out of a successful community partnership with the local council and health authority. Derbyshire police reported that their central Government grant is to be increased by only 3.4 per cent., falling short of the £9.6 million extra that the authority believes is needed to meet current service pressures. Mr. Nigel Thomas, the treasurer of the North Wales police authority, compared its 3.7 per cent. funding increase with the 6.4 per cent. that it needed "just to stand still".
	The problem faced by those police authorities stem from the additional costs loaded on to police forces. A major contributor to those additional costs is the ever- increasing central direction imposed by the Government. The police have been subjected to an ever-tighter central grip, with a plethora of targets, plans and agencies designed to regulate and direct them. There is a national policing plan and a police performance assessment framework, as well as public service agreements. Police forces are statutorily required to produce strategic plans and they are overseen by Her Majesty's inspectorate of constabulary, the Audit Commission and the Government's police standards unit. There is a national centre for policing excellence, which shortly will be subsumed by a new national policing improvement agency as a result of the Police and Justice Bill, which has been laid before the House.
	The centralisation of the police raises a number of issues in the context of the Government's proposals. First, on the cost of the centralised units, what will be the cost of the national policing improvement agency? Indeed, what is the cost of the police standards unit? Central spending on those units has increased substantially since they were introduced by the Government. Secondly, we must consider the cost of the bureaucracy with which the police must deal, and thirdly, with the opportunity cost resulting from the fact that police officers are not on our streets. It is well known that police officers, according to the Home Office's own figures, spend less than one fifth of their time on the beat, and that it takes six and a half hours to process an arrest.

Nick Herbert: I agree, and I shall come on to the issue of accountability, which is particularly problematic in London for reasons that the House will understand. The Metropolitan Police Commissioner has national policing duties and is appointed by the Home Secretary. He is accountable locally, however, to the Metropolitan Police Authority and the Mayor. As a result of being accountable to so many bodies, his true accountability to local people is considerably weakened, and that issue must be addressed as it is a problem not just for the system but for the commissioner. The confusion of accountability to the MPA and the Mayor will be only partly addressed by the changes that have been announced.
	First, therefore, central direction has the consequence of imposing costs. Secondly, initiatives announced by the Government tend to expire, the best example being their street crime initiative, which was set up by the Prime Minister to target the 10 worst-hit areas. It temporarily succeeded in reducing street crime between 2002, when it was initiated, and 2005. Since its expiry, however, Home Office statistics for July to September 2005 show that the number of robberies recorded by the police has increased by 11 per cent. to 23,500, following a 4 per cent. rise in robberies in the previous quarter. In London, half of street crimes last year involved the theft of mobile phones. Recorded gun crime rose nationally by 1 per cent. to 11,000 incidents, and the number of serious injuries from gun crimes rose by 18 per cent. to 470. Recorded drugs crimes rose by nearly one fifth to 41,100, and violent crime recorded by the police rose by 4 per cent. to 316,000 incidents in the three months to September. All the prime ministerial energy that was directed at securing the initiative and the resources that it received expired and, with them, its success in temporarily reducing crime.
	It is not just ministerial effort that can expire with central direction but funding. The Minister mentioned community support officers.

Andrew Pelling: Can that be seen on a larger scale in the context of the debate in London on the council tax precept? It is difficult to argue against an increase in PCSO and police numbers, and I would support such an increase, but the problem arises when it comes in combination with other increases, such as the Olympic precept, making a 16.5 per cent. increase? Does my hon. Friend agree that there is a need for close scrutiny of the value for money that will be secured from those PCSO teams?

Nick Herbert: Those matters will need to be addressed in a proper assessment of the role of PCSOs. That should be conducted against the background of a general acceptance of the principle of having a more flexible policing structure with a uniformed presence that does not just mean a regular police officer but can also mean the extended police family.
	Chief constables' ability to innovate will be important if we are to see the efficiency gains necessary to ensure that police forces continue to deliver against difficult financial settlements such as the one that the Government have announced. There are good examples of local forces showing such innovation and modernising their work forces in a way that drives up productivity substantially. In relation to offender management and custody, Northumbria police have introduced an integrated criminal justice process by developing a range of complementary police support officer roles. A 7 per cent. increase in constable strength at the front line was achieved by releasing police officers from custody and associated duties. Performance has improved, with higher file quality and timeliness; custody-related complaints have fallen by half; and detection rates, which have been a source of concern nationally, have increased by up to 14 per cent.
	Similarly, in Surrey the police CID office has been transformed to improve investigation. It was reorganised in order properly to meet public expectations, and the mix of staff was altered to include 60 per cent. of police support officers working with constables in teams led by advance detectives, which has delivered a better service. It has investigated 35 per cent. more crime, halved investigative delays, and tripled follow-up with victims. Moreover, it has improved results. Twenty-five per cent. more offenders are caught, with greater efficiency—in other words, at a quarter less cost. The use of support offices to perform roles that uniformed officers had undertaken can dramatically increase productivity.
	Humberside police have reconfigured their major incident rooms by employing police support officers in key roles. That has improved quality, created increased capacity and almost halved costs, which have been reduced by 43 per cent. West Yorkshire police have integrated their investigative support officers and investigation officers into their homicide and major incident teams, again increasing capacity and significantly reducing overall costs.
	Some senior police officers estimate that the savings achieved as a result of such work force modernisation could be as much as 20 per cent. It would take a very substantial increase in resources to match that level of improvement. That demonstrates that the input-led approach to policing, which has often been taken, is no longer appropriate when considering their performance. The point, surely, is not that spending on the police has increased: what should matter to us is outcomes. The competing claims that are made for putting police officers on the streets mean nothing if they will not actually be on the streets because they are tied up doing unnecessary jobs.
	If we are properly to examine the performance of the police and work out whether it is possible for them to improve their efficiency and make productivity gains—I remind the House that the success of policing under the funding arrangements that the Minister announced depends substantially on significant continuing efficiency gains—in fairness to them, and so that the public can judge the effectiveness of spending on the police and of additional spending, it will be necessary to have more robust measures of police performance and of crime.
	On the measure of recorded crime that the Government no longer like, one crime is committed for every 38 people living in England and Wales and 10 crimes are committed for every police officer. The Government prefer the British crime survey, but that still shows, comparing the levels of extra resources with the outputs of the service, that productivity has fallen. The survey showed falls in crime in the years before steep rises in police funding, which were of course partly borne by the local taxpayer. The rate of the fall in crime as measured by the survey has been unaffected by spending increases since 1999–2000. The arrest rate has fallen slightly since those spending increases, as have detection rates. The number of undetected crimes has reached more than 4.1 million—about a quarter of all crimes committed.
	I therefore welcome the Home Secretary's announcement that the way in which crime is measured will be independently reviewed. We are co-operating with the review team that he announced. That review should go alongside a simpler performance assessment framework so that the police can be properly held to account by the public.

Nick Herbert: I am sure that the Minister has taken note of that. The prevalence of property crime is one of the significant omissions from the British crime survey; I hope that the views of the Federation of Small Businesses will be taken into account.
	There must be a measure of crime on which the public, the police and the House can agree and in which they can have confidence. Only then will we be able to judge how successful increasing resources for the police has been and to hold the police to account for their performance. We believe that, in place of the Government's increasingly central direction of the police, there should be the local accountability referred to earlier, and that the operational independence of the police, which is so important, should be preserved.
	The pattern of the announcements on police grants in successive years is this: additional resources, the burden of which falls increasingly on the local taxpayer, combined with an ever-tighter central grip on the police. There is an alternative agenda, which constitutes being serious about police reform and work force modernisation and focusing on that as a priority, rather than concentrating on uncosted amalgamations that raise serious issues of accountability and on which local people have not been properly consulted.
	That agenda of police work force modernisation should be combined with the enhancement of local accountability that I mentioned. That will deliver what the public want: not only the security that they seek, to which Members on both sides of the House subscribe, to deal with very serious crime and the threat of terrorism, but a tackling of the volume crime that touches people's lives daily. People want a police presence on their street; they want to see that the police are not only detecting crime and bringing offenders to justice, but preventing crime from happening in the first place.
	Sir Robert Peel's ninth principle of policing stated that the test of its effectiveness is the absence of crime and disorder—and not, therefore, any activity on the part of the Government or police forces. The extra resources announced today have still given rise to serious concerns among local police authorities and forces about their ability to cope, given the level of the funding settlement. It is essential that those resources are matched with better police performance. Police reform, as well as police funding, should be the Government's priority.

Paul Truswell: What I am about to say will not surprise my hon. Friend the Minister. Our previous debate on issues relating to west Yorkshire dwelt mainly on reorganisation. I make no apology for repeating some of the funding issues to drive the message home.
	As my hon. Friend knows, thanks to the Government's funding of record levels of police officers and the introduction of PCSOs in west Yorkshire, volume crime levels there have been driven down substantially. Pudsey and Weetwood division in my constituency has been at the forefront; in the last full year for which figures are available—2004–05—8,383 fewer crimes were committed there, a fall of 19 per cent. Figures for burglary and robbery and for theft of and from motor vehicles fell by even more, and the latest figures for the current year are showing that same downward trend.
	Despite those encouraging figures, we still need more resources to maintain the downward trend on volume crime and make a much greater impact on antisocial behaviour and violent crime. We need to sustain that sort of progress, but we also need to meet major challenges. As I have said before to my hon. Friend, in October 2005 Her Majesty's inspectorate of constabulary reported improvements across the board for West Yorkshire police; there was an excellent score for investigating crime, and good ratings for reducing crime, promoting safety and the effective use of resources.
	More worryingly, the force's ratings for local policing and dealing with the public, although now improving, were still far short of what the people of west Yorkshire rightly demand. For example, the handling of calls is a continuing source of concern to my constituents. I regret to tell my hon. Friend that this latest funding round will not enable the progress that I have described to be sustained or the challenges that I have mentioned to be met.
	The force's latest estimate of the budget increase needed next year is £17 million higher than the funding available with a precept increase of 5 per cent. Admittedly, that includes growth of funding for issues such as counter-terrorism, quality of service commitment and PCSO funding. However, even without that desirable growth, the funding gap is substantial, and that should not be the case. The funding formula has been revised in a way that reflects policing needs across west Yorkshire, and is much more generous than the funding formulae imposed by the Conservative party that benefited the south at the expense of the north.

Lynne Featherstone: It would have been helpful if the Government's report had incorporated all the funding in support of the fight against crime. If so, we would know exactly what the Government are doing in the round and where the grant to the police authorities will be affected by movements elsewhere in their funding priorities. We have heard some of the detail today but have not had it before; if we had, we could better have assessed the shortfalls, of which there appear to be some.
	Has the Minister taken it into account that when, as he announced, extra funding is provided for security forces and counter-terrorism operations, which fall outside the police grant, there is a knock-on effect for local police, who inevitably see their work loads rising, to some extent, as they service and facilitate those extra activities? Hence, there is a need for extra funding to match that increase, as the local police and security forces often work together.
	I have been in contact, like other Members, with the Association of Police Authorities as well as the Association of Chief Police Officers. Both have expressed serious concern about the grants. As the hon. Member for Arundel and South Downs (Nick Herbert) said, they face a funding gap, in broad terms, of £250 million, which would need an annual funding increase of at least 6 per cent. in 2006–07 and 2007–08. That would put many authorities in extremely difficult positions. They would either face cuts or have to raise council tax, at a critical time for the country, a time at which we must support our police and enable them to carry out their job properly.
	Police budgets now include the need to maintain the higher number of police officers we thankfully have. That increase in officers has delivered many benefits in reducing both the fear of crime and crime itself. All parties have welcomed the safer neighbourhood scheme and the return of policing and patrolling at the neighbourhood level. But the real cost will not be adequately funded by the grant in the report, and there must be a danger that police numbers will be reduced as a result.

James Gray: As I understand her premise, the hon. Lady believes that we are satisfied with the level of policing in local areas and on the ground, and are merely concerned about how the grant will pay for them. She has not been to Wiltshire where we are deeply unhappy about the level of policing. We are not seeing the police on the streets, and this grant will make that worse.

Lynne Featherstone: The hon. Gentleman is quite right. I am not saying that we are satisfied, merely that all parties welcomed the safer neighbourhoods scheme as a means to bring policing back to local areas. Whether it has come back to his area, I cannot say; clearly, it has not.
	The real costs will not be adequately funded by the level of grant in the report, and if it is not satisfactory now, it certainly will not be next year. Increasing burdens are imposed by pay inflation, new legislation and Government initiatives, and police authorities are inevitably going to find themselves short of a bob or two; or indeed a bobby or two. [Laughter.]

Stephen Pound: Stop, stop. You're spoiling us.

Lynne Featherstone: Just a bit of humour.
	The Government have introduced masses of new legislation, with all that that entails in what is expected of the police. There is now the burden, which will constantly increase, of enforcing those new initiatives, whether they be drink banning orders or enforcement matters, such as those on home furnishing companies selling cutlery to people under 18 years old. Also, the change that means all offences are now arrestable will, in itself, create more of a bureaucratic paper chain without, despite all the talk about technology, the on-street technology necessary for a modern police force, so that officers can spend more time on the streets. Even traffic wardens have gizmos that send messages back and forward. There are burdens from alcohol disorder zones, increasing numbers of antisocial behaviour orders, policing the one third of ASBOs that are breached, dispersal zones and new powers brought in under the licensing changes. An endless steam of new duties has been imposed on the police, and those new statutory responsibilities, as well as delivery of police reform, including the neighbourhood policing initiative, bring significant costs.
	Hon. Members will no doubt speak—they already have, to an extent—on behalf of their own police authorities, but it is clear that a significant number of authorities feel that the increase in funding is inadequate and will cause difficulties in fulfilling expectations and keeping up the standards that the public want. They will struggle to meet ongoing cost pressures.
	The Metropolitan Police authority, on which I served for five years before I came here, is an example. My Liberal Democrat colleagues at the Greater London Assembly have consistently asked for more money for London policing, not least because of the considerable extra burden on London caused by national and capital city functions, and so that it does not abstract officers from other areas. I was therefore disappointed to see that the MPA's total revenue grant entitlement had fallen by £1.764 million.
	Under the new grant formula, the Met's entitlement increased by only 1.15 per cent. That is why the Liberal Democrats and the Mayor of London have been arguing about the Mayor's failure to persuade the Government to adopt a distribution formula that would give London its fair share. To avoid extreme changes in one go, the Government have used floors and ceilings. At the time of the consultation, the floor was set with a minimum increase of 3.2 per cent. for every police authority, with a formula entitlement of less than that. Hence, the MPA was due to receive a 3.2 per cent. increase, although its entitlement was only 1.15 per cent. As a result of the consultation, however, the Government adjusted the grant upward for some police authorities. Because the total available does not change, they have reduced the floor to 3.1 per cent., resulting in a reduction for the MPA, which will also apply next year. Even if the allocation were to increase, the authority would not necessarily get more money as a result of the floor.
	We have heard of other grants today, and the Metropolitan Police service also bid for about £140 million extra but has got around £30 million. It will all go on extra work and staff, so the service will be no better off. The Commissioner of Police of the Metropolis, who I understand has just arrived at the function that I was meant to be hosting, has said to the MPA that what is not funded will not be done. That is serious for London. Another part of the Met's work involves the security services, including MI5. Funding has been increased hugely, but that puts more pressure on the Metropolitan police service.
	As for special payments, a report produced about two years ago showed that the MPS costs for the capital's royal and diplomatic protection were up to £45 million a year more than the special payments. Seemingly, despite Mayor Ken coming back into the Labour fold, he has been unable to persuade the Labour Government to recognise the importance of policing to Londoners. Does the Minister agree that the disappointing increase in the grant entitlement to the MPA, of slightly more than 1 per cent., represents either a failure of the Mayor of London to persuade the Government of London's particular needs, or a failure of the Government to understand London's needs?
	I am concerned that the increase in police funding is increasingly being paid for by an increase in council tax. The 6 per cent. increase that the Association of Police Authorities and the Association of Chief Police Officers have termed necessary to meet costs will have to be made up by taking the money out of our pockets through the precept. It was said last year that council tax would have to rise to 12 per cent., but police authorities say that they will have to increase reserves to maintain the capped level. That will not happen two years in a row. In addressing the issues of crime and antisocial behaviour in our communities, the Government have been able to push more and more of the costs on to council tax payers through the precept.
	Police forces now have to decide at what level to set their budget and to what level they want to raise council tax. Council tax is not a fair tax. It is not fair on the elderly, who have no chance of increasing their income to deal with council tax increases. That applies especially to women, whose pensions are a scandal. It cannot be right to fund ever-increasing police expenditure in this way. The amount of police expenditure that is funded through council tax has more than doubled. It now accounts for more than 21 per cent. of force expenditure compared to 12 per cent. in 2001–02.
	We all agree across the parties that there is a need for more police officers on the street and support for safer neighbourhoods. However, as I speak, the Government's proposals to merge police forces deliver a double whammy for local communities. People will be expected to fork out more council tax to pay for the funding gap. At the same time, they will have less of a say in how their police force is run. Indeed, there will be a triple whammy in that we do not know where the cost of the proposed merger will be lumped. Well, we can all guess.
	We are faced with a rushed and expensive merger programme that will cost millions of pounds for our police forces to put in place. We all realise and acknowledge that smaller forces can struggle with complex cases, but they should be provided with a national resource on which they can call, or another form of commissioning on which they agree. They should not be forced into a merger that will seriously undermine local accountability.
	It seems that the Government, and given the written statement today, are determined to push on and, effectively, financially to punish police forces that do not wish to merge. Moreover, the Government are obsessed with micro-managing policing throughout the country. The latest example is the Police and Justice Bill, which is coming down the track at us. I raise the matter because the police grant to police authorities will be controlled, if we are not careful, by the Minister. The Bill will give the Home Secretary power to intervene in the business of local authorities; for example, who sits on them, what qualifications they have and how many members there are. Even more seriously, their autonomy will be removed and their function constrained by suggesting what police authorities should be focusing on in their own communities. That is not only Big Brother, but a rather nasty and controlling influence.
	While the grant will be given, local control will be taken away. The Home Secretary wants carte blanche to meddle in the composition of police authorities without having to ask for parliamentary approval. No reassurance is given to those of us who are concerned about the loss of local accountability under the police merger plan.
	As we have heard, police authorities have continually and successfully exceeded their annual efficiency and saving target of 2 per cent., including cashable savings of 1.5 per cent. As has been said, the Chancellor of the Exchequer even paid tribute to the police service for its success on efficiency savings. Clearly paying tribute is cheaper than paying.
	Separate to the settlement, a total of £125 million in capital funding over two years has been held back by the Government to be handed out to any police authorities volunteering for mergers under the Government's plans. Will the Minister announce where that £125 million is going? I would welcome a statement from the hon. Gentleman assuring us that all the police forces that do not merge will not suffer and will not receive less funding as a result.
	The Government's grant proposal is not enough overall. There are some winners, but there are many losers. They will have to make a terrible decision between unacceptable cuts, given that we have a service that is only just recovering from the swingeing reductions in finance that were imposed on it by previous Governments, or increases in council precepts that will hit the most financially vulnerable in our communities.

Roberta Blackman-Woods: I am grateful for the opportunity to raise specific issues relating to the funding of the Durham constabulary. Will my hon. Friend the Minister acknowledge that that constabulary is facing particular problems with its budget over the next two years, and that substantial cuts in front-line services are likely to occur unless urgent action is taken by the Department to address the problems?
	There is particular concern about pensions and how they are funded, not least because Durham has had an historically low-level based budget. I shall demonstrate that by referring to a recent communication between the Durham constabulary and my hon. Friend the Member for North Durham (Mr. Jones). It is said that the funding gap for the authority, given a 5 per cent. increase in the council tax precept, will be £6 million in 2006–07, rising to £7 million and then £8 million in 2007–08 and 2008–09 respectively. We can use some reserves in the short term to try to close that gap but we are looking to reduce our base budget by £8 million over the next three years. That will impact on the performance of the force as it will require a reduction in the number of police officers and police community support officers. Overtime will also be reduced as well as the number of civilian staff, leading to de-civilianisation. In addition, there will be a scaling down of support services. Clearly, we do not wish to see such consequences.
	Can the Minister give reassurance to my constituents that the gains that have been made across the county in terms of increased police numbers and a reduction in crime levels will not be jeopardised by a failure to take action to solve the current funding problem? Can the Minister give the House an assurance that he will re-examine the funding of the Durham constabulary with a view to ascertaining whether measures can be taken to solve the current problems?

Crispin Blunt: It is a pleasure to follow the hon. Member for City of Durham (Dr. Blackman-Woods), the city where I was educated. I am sorry to hear that the hon. Lady's police force is suffering in the same way as the Surrey police force.
	I could not help but reflect on the comments of the hon. Member for Pudsey (Mr. Truswell) about the people of west Yorkshire smelling the gravy. I have a pretty good idea of where the gravy train is coming from. Any examination of what has happened to the funding of the Surrey police since 1997 makes the position extremely clear.
	I tabled a question to the Home Secretary a few days ago to try to establish exactly what had happened to the funding of the Surrey police per head of population since 1997. The answers were startling. In 1997–98, the Home Office police grant per head of population was £57.80. The council tax per head of population was £19.51.
	Since then, in cash terms that are unadjusted for inflation, the Home Office grant has fallen to £54.29 per head of population, which has been mirrored by a fall in the national non-domestic rates per head of population from £19.72 to £16.25. The revenue support grant has also fallen from £20.01 to £15.39 per head of population. As my hon. Friend the Member for Arundel and South Downs (Nick Herbert) made it clear, council tax has gone up by 192 per cent. in real terms since 1997. It is supporting the funding of the county constabulary of Surrey, the grant of which is bouncing along the floor. Of course, the hon. Member for Pudsey wants the floor to be withdrawn so that West Yorkshire police can go through the ceiling.
	We must examine why that has taken place. Surrey police has consistently faced the most stringent financial conditions over the past eight years. On two occasions during my time in the House, I took two delegations of Surrey Members, representatives of the police authority and the then chief constable to see the relevant Minister. I first took such a delegation to see the Home Secretary when he held down the position of Minister with responsibility for the police. I went with the then chief constable, Sir Ian Blair, and I had the pleasure of taking Mr. Denis O'Connor at a later stage. Those two gentlemen have gone on to better and greater things, certainly in the case of Sir Ian Blair.

Crispin Blunt: As my hon. Friend pertinently remarks, my efforts and those of the two gentlemen failed to persuade the Home Office that the financial situation of Surrey police was desperate. They certainly failed to the close the funding gap for Surrey.
	I did not hear the Minister make any attempt to explain the fact that an enormous discrepancy remains between real inflation and police inflation. He has made generally welcome changes regarding the provision of police pensions, which will give more certainty, although he has docked 0.1 per cent. off the rise to the police to pay for it. He achieved that by making an adjustment to the floor, so there will be a loss to Surrey police and all other forces receiving floor-level funding. Police inflation remains at 5.7 per cent., which is a different rate from the retail prices index inflation. The difference between the two for Surrey police represents about £4.5 million. Police pensions continue to contribute to police inflation, even with the new arrangements, as do police staff pay, police officer pay, meeting national requirements, such as implementing the recommendations of the Bichard inquiry, and the consequences of legislation such as the Freedom of Information Act 2000. The cost to Surrey police of removing the floor would be some £15.7 million, or about 600 staff. Surrey is the lowest funded police authority in the country when measured by funding per head of population.
	The reason why that has happened since 1997 is explained by the detail of the formulae in "The Police Grant Report (England and Wales) 2006/07". The Minister said that he did not really have responsibility for formulae because they were local-government based. He said that they were not really anything to do with the Home Office at all because they were based on a general appreciation of need. However, sitting inside the formulae are the insidious changes that have been made across the piece to the public services of the United Kingdom, which have had a hugely deleterious effect on those services, especially in the south and south-east on England. A disaster has overtaken the Surrey police and the health service in Surrey. I have the hospital trust with the biggest debt in the United Kingdom, and the Surrey and Sussex strategic health authority is in the realms of financial disaster, too. All those problems are connected to the formulae that are applied to public sector funding.
	One or two little vignettes in the report deserve to be brought to the House's attention. I confess that I am no expert on the matter, but I have read the report and attempted to understand it. There appear to be seven separate police crime top-ups in the principal formula. I do not know whether that is because the formula has changed every year since the Government came into office because they decided to make new adjustments each year. One sees that indicators such as single-parent households, student housing and a category called "hard pressed" appear more than once in the top-ups. My favourite factor applied to funding is in police crime top-up No. 6: the log of population sparsity. Population sparsity causes a reduction in the amount of money made available to the police, so the more sparse an area's population, the more money the Government remove from its police allocation. To make up for that, there is a police sparsity top-up in the formula to add back money.
	The document is enormously difficult to understand. I doubt that the Minister understands all the details because he would need a degree of mathematics to know how the formulae are determined. I would be interested to find out how they are determined, but they are way beyond my A grade at A-level maths—[Hon. Members: "Ooh!"] I have to say that I took the exam in the days when A grades at A-level maths actually meant something. One would need to be an expert statistician to understand how the formulae are determined.
	There is another extraordinary multiplication factor in police crime top-up No. 7. It says that wealthy achievers are to be multiplied by 3.0493—whatever that means—and then subtracted from the funding formula. Having included adjustments in the formulae to take account of student housing, young male unemployment, overcrowded households and all the rest, why on earth is there a need to penalise people who are identified as wealthy achievers? I looked in the document to find out the definition of wealthy achievers. If one wishes to be able to afford to buy a property in Surrey these days, being a wealthy achiever is probably a basic necessity.

David Heath: I hope that the hon. Gentleman is not going to draw attention to the adjustment for terraced accommodation because it has worked rather well for Avon and Somerset constabulary as it has been considered to be a factor of deprivation for Georgian Bath and Georgian Clifton.

Crispin Blunt: I could also refer to terraced accommodation in Fulham, which is where my London home is. I have a vague idea what my home is worth—it is a great deal more than it was when my wife and I bought it 12 years ago. I find it very odd that the factor is used in such a way.
	I wonder whether you, Mr. Deputy Speaker, or any other hon. Member is able to understand the definition of wealthy achievers:
	"The proportion of household residents living in areas classified as ACORN category Wealthy Achievers, as defined in ACORN data produced by CACI Limited, based upon information from the 2001 Census and the updated ACORN classification released at the end of 2004."
	I hope that the House is assisted by that. It would help if the Government, when bringing documents before the House, made them available and simplified them as much as possible so that we can understand precisely what they are doing with these formulae. I suspect that they do not want to do that because if we could see exactly what they were doing with the formulae, the extent of the rearrangement to move money for political rather than operational purposes would be made all too clear.
	My particular concern on behalf of the Surrey police authority is that it is caught in the Catch-22 of management options. If it thought that reducing the number of officers was the best way to try to maximise the limited amount of money it has for dealing with crime in Surrey, it could not do that. If it did, it would lose the crime fighting fund of £4 million. If Surrey goes under 1,921 officers, which is what it had on 1 April 2004, it loses another £4 million, even if having fewer officers would be a better way of using its limited resources. The force must have a set number of community support officers by 2008—326, I think—but the funding for that appears to come to an end in that year.
	The greatest management tool that will make life difficult for Surrey is, of course, capping. I know from having spoken to the chairman of Surrey police authority and others that it will be impossible for the authority to set a budget below the expected capping limit and sustain current performance. The Government, by imposing the capping limit, will enforce falling police standards in Surrey—that is the situation that we have to face. That is despite the fact that the authority will be plundering its reserves, which are already said to be inadequate by Denis O'Connor in "Closing the Gap".

Crispin Blunt: No, I will not, if my hon. Friend will forgive me. I know that others want to speak and I want to get to the end of my remarks as soon as possible
	It is suggested that the British Transport police may be wound up and their responsibilities passed on to local area police forces. I understand—my source is the clerk, or chief executive, of the British Transport police authority—that the force receives some of its funding from train operating companies. In Surrey, we have the busy Brighton main line, and a number of other important train services pass through the county, but of course none of the money would be passed on from the train operating companies to assist in taking on that policing responsibility. I hope that the Minister will be able to respond to that point.
	There is only a faint silver lining to the cloud of amalgamation hanging over Surrey: the county is so poorly funded that it would have a negative dowry if it entered a marriage with any of the surrounding county forces, so they are all fighting not to have anything to do with it. If Sussex, the county of my hon. Friend the Member for Arundel and South Downs (Nick Herbert), was amalgamated with Surrey, an immediate 17.6 per cent. increase in the council tax would be required to pay for that. If we are amalgamated with Hampshire, an extra 15 per cent. in council tax will be required.
	That illustrates the extent to which Surrey police force has been underfunded since 1997. Over the past eight years, successive chief constables and chairmen of the police authority have made a very good fist of sustaining operational performance despite enormous financial stringency. However, the pips have squeaked long enough. Operational performance will be severely threatened if this continues, and I urge the Government urgently to take a serious look at the formula. I know that my hon. Friend the Member for Guildford (Anne Milton) seeks to bring me and other colleagues to see the Minister to discuss the matter in detail.

Elfyn Llwyd: The main issue that Dyfed-Powys police authority has with the settlement is a £2.7 million shortfall. It pleaded with the Government to deal with that—and to be fair, I must tell the House that they met the authority part of the way and, on 30 January, announced a further £1.1 million. The authority still has a shortfall of £1.3 million. Unfortunately, that means a hefty increase in council tax, because that is now the authority's only option.
	Dyfed-Powys police force is opening up small police stations, not closing them down. It has an excellent track record, but it will probably be capped because it foresees an increase of 6. 8 per cent. in council tax to fund the shortfall. Without that shortfall, the estimated council tax increase would have been about 1 per cent. I understand that the authority is seeking legal advice. It is far from happy, so the Minister's rather upbeat introduction is not being echoed in Dyfed-Powys.
	North Wales has received a 3.2 per cent. settlement, and major changes to the funding formula and pension payments have been protected by the floor grant of 3.2 per cent. Unfortunately, council tax payers in north Wales already pay the highest police precept in Wales, and they face another inflation-busting increase this year. They could end up paying more than 10 per cent. extra this year just to maintain the same level of service. That is one of the four options for the force. The other "standstill" proposal would involve a 6.58 per cent. rise in the bill for policing, with the force having to find an additional £1.8 million. Last week, a police authority committee meeting at Colwyn Bay said that the authority would have to face very difficult choices.
	The performance figures for North Wales are excellent, with the fourth lowest crime rate in England and Wales for recorded offences, at 56.1 per thousand of population. Recorded offences have dropped by 3,688, with a sharp fall in vehicle crime and house burglaries, and the detection rate has reached 43 per cent. This year's draft police authority newsletter boasts, "We are winning"—and I am sure that it is. Serious violent crime has shown an increase slightly below the UK average.
	The forecast for the police services budget involves an increase of about 6 per cent., for which the council tax increase is likely to be between 5 and 7 per cent. That is a serious position, and the North Wales police are concerned about it. As I have said, they have been performing very well. I made the point of comparing their performance to that of Dyfed-Powys, and I shall refer to that of Gwent in a moment, before briefly addressing the question of the rushed and ill thought-out amalgamation.
	A great deal of data have been produced comparing North Wales police with other forces, and the reports show that they are performing excellently and investing in the right areas. For example, the police officer to police staff ratio is higher than in most other UK forces. Even so, the £1.5 million cut will mean between 30 and 50 job cuts, although North Wales police already have fewer staff than other forces. This will inevitably put North Wales's good financial and performance records at risk.
	Changes have been made to the way in which port security at Holyhead is funded. Obviously, this is a sensitive subject, but just as the Home Office identified a perceived gap in the capacity to deal with level 2 crime in these areas, it has cut its financial investment for that purpose in the North Wales police. The budget for police community support officers—PCSOs—will also be cut in due course. The rate at which the North Wales force is now being funded does not allow it to pay PCSOs at the right grade, which is creating problems for morale, job satisfaction and retention. And all this is in advance of the tapering that will inevitably take effect, cutting off the money from the centre to finance these officers.
	The chief constable of the Gwent police force has rightly said that the funding formula is too complex—a point that was echoed just now by the hon. Member for Reigate (Mr. Blunt). Gwent must find £5 million savings, and the suggested restructuring that we are now hearing about might have to be paid for by borrowing. That is another force—albeit a small one—that is doing excellently for its size. There are no problems at all there. Only a few months ago, Her Majesty's inspector of constabulary gave the Gwent, North Wales, Dyfed-Powys and South Wales forces a clean bill of health.
	All those forces are doing well. However, the preliminary budget for Gwent for 2006–07 shows an increase over the budget for the current year of £6.1 million, or 6 per cent. That increase, which is in line with those for other police requirements across England and Wales, will be needed to cover pay awards, price inflation, reducing specific grants on Government initiatives, pension costs and unavoidable operational items. Because of the gearing effect, an increase in expenditure of 6 per cent. and an increase in central funding of only 3 per cent. will produce an increase in council tax of 13.6 per cent—and of course, we expect a cap of 5 per cent., so huge savings will have to be made elsewhere, including job cuts and cuts in services. That is the last thing that Gwent police would want.
	I want to talk briefly about the statement that was sneaked out today. That was an abominable thing to do. The press and media in north Wales were briefed about this matter on Friday evening, because a member of the press told me personally that "the game was over"—he used those words. As a Member of Parliament, I was rung by the BBC at my home yesterday evening, also to be told that the game was apparently over. I find it abhorrent that the Government should brief the media on a Friday, and I should be told about it on an off-hand basis the night before the statement was sneaked out through the Library today.
	That is an appalling way to do things, and it simply underlines the fact that the case for the amalgamation has not been made. I pressed the Minister for Policing, Security and Community Safety for weeks to give me the justification for the magical figure of 4,000 officers. I finally received a stupid little graph showing me how it would work. It had nothing to do with policing, and it was absolute nonsense; the case for the amalgamation has not been made.
	When the proposal was first announced in September, the Secretary of State for Wales said that the case for the amalgamations would have to be proven. It has not been proven in any shape or form. In Wales, we remain totally opposed to the proposals. Many senior officers and all the police authorities are against them. It would take a chief officer between four and a half and five hours to travel by car from Cardiff to Holyhead; that is absolutely ridiculous.

Elfyn Llwyd: I hear what the hon. Gentleman is saying. I know that the Dyfed-Powys force is in daily contact with forces over the border, and that they have an excellent exchange of information. The North Wales police has hourly contact with the Cheshire and Merseyside forces, exchanging information and intelligence. A huge and dangerous drugs ring was busted by the police forces of South Wales, Gwent, and Avon and Somerset, working together on Operation Triban, giving the lie to the idea that the existing forces cannot handle organised crime. I presume that terrorism will stop this side of the Scottish border, because the Scottish forces, although the same size as the Welsh ones, are thought to be able to handle terrorism and organised crime. That is nonsense.

Jim Devine: Is the hon. Gentleman not aware that we are discussing an FBI-type Scotland-wide police force?

Owen Paterson: Thank you very much for calling me to speak in this debate, Mr. Deputy Speaker, and may I repeat the apology that I made at the beginning? I was here for the opening remarks, but there was such anger locally that I was asked to make comments outside the House on the extraordinary statement that has been slipped through in the most skulking and underhand manner by the Home Secretary. I was rung up by my local radio station, BBC Radio Shropshire, at about 1.30 pm. It had already had notification that there had been a statement and asked whether I knew anything about it, which I did not.
	My secretary immediately looked on the Home Office website, but there was no mention whatever of such a statement. I then rang the chairman of the police authority, who knew nothing about it. Then I went down to the Library and got this copy, which brought the most unwelcome news that the West Mercia police force is going to be rammed into a monster regional force. Mr. Deputy Speaker, will you pass on to Mr. Speaker the fact that I find it scandalous that such a huge decision is being announced in a two-page written statement placed in the Library?
	I congratulate West Mercia on being judged the number one force in the country, according to the widest range of criteria established by the Home Office, although its geographical area is the fourth largest, and it is the largest landlocked force. It is dramatically less well funded by central Government than all the forces that surround it. It receives £94.38 per head, and as we have just heard, North Wales receives £116, while Dyfed-Powys receives £105.24 and Gwent £131.45. We are massively worse off than the Welsh forces.
	Let us compare the funding of forces in the north of England. Cheshire is well in with £112.36, Staffordshire receives £107.96, West Midlands receives a massive £167.25, Warwickshire receives £99.69, and Gloucestershire receives £107.52. That is because West Mercia was one of the first forces to—if I may use a ghastly piece of jargon—civilianise. It took police officers away from routine activities such as answering telephones, putting those duties into civilian hands. The force is thus being penalised for its historic efficiency. This is not just a whinge about money. I am trying to draw attention to the fact that West Mercia has still emerged as the number one force in the country—although for reasons that I do not understand, the Minister for Policing, Security and Community Safety rubbishes it at every opportunity, and tries to run down its achievement.
	Only 10 days ago, I took the chairman of the authority and the chief constable to meet the Minister. They have made a strong case for the view that no financial gains can result from the huge amalgamation of the West Midlands forces. As they have said, West Mercia is already an extremely efficient force that has made prudent savings, which it intends to invest in strategic policing measures to deal with issues such as terrorism and serious crime, which were mentioned by the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). West Mercia proposes to spend £2.9 million of its own funds on an extra 95 officers who will handle those issues; it has a record in that regard. I am pleased to see that my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) has just come into the Chamber, because I was about to say that when the IRA blew up Shrewsbury castle, West Mercia dealt with it. When the IRA blew up Tern Hill barracks in my constituency, West Mercia dealt with that as well. Bizarrely, when the IRA turned up at Weston Park for the summit, West Mercia police were actively involved in protecting the terrorist leaders. They were also involved at Weston Park when President Clinton was there.
	West Mercia has been involved at the highest level in key strategic policing issues. For instance, Hereford contains the headquarters of the SAS, which must be a serious target for those who do not have the good will of this country in their sights. The force has handled all those duties most efficiently, and I cannot understand for the life of me why the Government are ignoring the fact that it is so efficient, and also so popular.
	West Mercia carried out a survey of public opinion, which is probably unprecedented among police forces. Not one of the Members of Parliament who were consulted—including a Minister and a Parliamentary Private Secretary—and not one county council, unitary council or district council has written in to approve what is going on, but 108 parish councils have written in to support the idea of retaining West Mercia as a strategic force with its own boundaries. Following a telephone survey, 96 per cent. of respondents said that they wanted the force's status to be maintained, because it spent its funds well. That is what the debate is about—efficient policing, and local policing.

Eric Pickles: I will give way to the hon. Gentleman; he has a big place in my speech and I want to give him star billing. I will come to him in due course. Let us move on to supported borrowing. I want to make some progress so that my hon. Friends can speak.

Eric Pickles: Would the hon. Gentleman do me the courtesy of allowing me to reply to the hon. Member for Hastings and Rye (Michael Jabez Foster)? I regret inadvertently starting the pickle analogy. Peter Jones, the leader of the council, is a man of considerable experience. He has taken the council out of a difficult situation, and his record in local government is second to none. The hon. Gentleman's special pleading is not persuasive.

Neil Turner: Labour Members would have listened with growing incredulity to the speech of the hon. Member for Brentwood and Ongar (Mr. Pickles), had he continued. I shall give him one reason for that incredulity. He mentioned Cambridge county council having to make cuts of £1.6 million. That council has a population of about 737,000. In the 1980s and 1990s, when I was a member of Wigan council, which has a population of 300,000, we were required to make cuts of £10 million by the Conservatives—not just in one year. Year on year, we had to make such cuts. It would do Opposition Members some good—those on the Front Bench as well as those who intervened earlier—if we had a few choruses of "mea culpa" before they continue their comments.
	There has been a remarkable growth in the amount of money given to local government by the Labour Government, and that is the case again this year. I have problems with this year's settlement—not with its size, but with the way the cake is sliced up. The major problem is with the formula. The new formula recognises need, particularly for social service. I welcome that. A formula based on evidence that recognises need will lead to a fairer distribution.
	However, a damping mechanism has been introduced, especially in relation to social services, so that all the gains that were made by many of the authorities in the organisation that I chair, the special interest group of municipal authorities, have been damped out. I am not opposed to damping in principle. It is right, for the reasons to which I alluded in my opening remarks. When I was on the council, I would have preferred damping to massive cuts year on year. We could have achieved much more. In this case, however, the damping is far too harsh. In SIGOMA authorities such as mine, about £250 million will be taken out of our social services. We have a floor of 2.7 per cent. That protects councils that are currently over-resourced in social services at the expense of councils such as mine that are under-resourced and will continue to be so for some considerable time.
	I regret that during the consultation period the Minister did not take on board the case made by SIGOMA authorities and others for reducing that damping to some degree. Had he been able to reduce it even by a small amount, that would have led to about £35 million going back into SIGOMA and other authorities, including county councils. That would have significantly improved their ability to serve their people.
	It is not just a question of damping in social services. On top of that, we have damping in the overall budget, with floors of 2 per cent. and a reduction of about 85 per cent. on the amount of money that authorities receiving more than the floor should get to pay for that.
	I cannot understand why we have those two elements of damping. The local government settlement is about how the Government divvy up the amount of money that they have: it does not relate to the amount of money that each local authority will spend on any one element within it. Local authorities have the freedom to make those choices—they do not have to spend the amount of money on social services that is allocated by the Government—but a double damping effect places a tremendous imposition on them. It is imperative that the Minister considers this in great detail. It will not be an issue over the next year, because that is fixed, but when he comes to deal with the next settlement it is essential that that double damping is taken out; otherwise, we will have major problems with local government settlements in future.
	The result is that there will be quite severe cuts in the number of services provided. Those cuts are not likely to fall on particular individuals, because all good local authorities will ensure that they deal with the essentials. However, where individuals are supported by social services, the bar of access to services will start to be raised, and the charges levied by authorities will be increased. We will end up with a postcode lottery. Authorities that have a higher rate for historical reasons, and therefore benefit from the damping, will be able to provide services that authorities such as mine, which are suffering from the damping, will be unable to provide. One authority will be unable to provide the services that another authority next door is able to provide. I am sure that Members on both sides of the House, including the Minister, would agree that that situation is wholly unacceptable and must be dealt with.
	Another issue that affects local authorities in the SIGOMA areas is that most of us have primary care trusts that are seriously underfunded. The underfunding of PCTs in SIGOMA authorities amounts to £215 million. That is in addition to the £250 million that we have lost because of the damping. As a result, PCTs have no resources available to help local authorities with their social services budgets. People will not get the level of support that they need. Instead of being treated at home in dignity, close to their families, they will become more dependent and eventually have to go into acute hospitals, putting increasing pressure on the NHS. In many local authorities, it is not unusual, as Tom Jones might say, for social services and PCTs to pool resources in order to provide joint funding for those purposes. However, in SIGOMA authorities there is a single pot with two gaping holes that are pouring out £250 million and then another £215 million from those services.
	It is essential that Ministers set a time scale to end such damping. Without that, the whole formula that we have set up—I think it a good formula and agree with it—will become worthless; Ministers might as well throw straws in the wind to decide on the amount of money. The whole thing will become discredited and the whole point of it would be brought in to disrepute.
	The following two things are essential in the next round of local government settlement. First, we must have a single damping mechanism on the total amount of money that goes to local authorities. Secondly, we must have a definitive and transparent time scale, so that the damping that I mentioned can be eased out. I do not want authorities to have to make savage cuts. However, they need to understand that, because of their needs, they are over-resourced in comparison with other authorities and the Government need to take account of that.
	I say to the Minister that if future settlements do not include those two things, a lot of Labour Back Benchers will be seriously discomfited.

Sarah Teather: The local government financial year has a kind of ritual about it. It is a bit of a dance, with a touch of stand-off here, a bit of flattery there and a complex move somewhere else, all designed to distract the eye.
	Contrary to popular wisdom, the new year actually begins around October, as the Local Government Association and council leaders begin to set out their stall of doom about council service cuts and council tax rises. The Government then fight back with a macho swipe at wasteful councils and warn them that they must stay within their budget this year or face the wrath of the cap. Then there is a stand-off, a bit of a public argy-bargy, a spot of name-calling and a public falling-out.
	At the last minute, the doughty Minister trawls around his colleagues with a begging bowl to find a few extra coppers to forestall the crisis. He announces his Christmas bonus to councils in December and tells them that they need to thank him for it. However, councils protest that it is still not enough and charge their MPs to explain the difficulties to the House in January. Then councils fix their budgets, cut some vital services, hike up the council tax and the voters protest; so Ministers cap them. Councils then cut a few more services and we begin the annual dance of the pantomime horse all over again. [Interruption.] I had to get the pantomime horse in; there was a race to get it in first.
	In December, the Minister announced that a few extra scraps would again be thrown from the master's table to grateful local councils, so why do councils still moan? They complain because it is the very system that keeps them in chains, and until the Government are willing to tackle that, we shall be forced to repeat the same moves, year after year.
	In the meantime, the Government have introduced some reforms, but as the hon. Member for Brentwood and Ongar (Mr. Pickles) said, the local government community was united in opposing them. The Government had a consultation about the change to the formula, but everybody said that it would be a bad idea; they introduced it anyway. The problem with the new formula is that, far from making things simpler or more transparent, it increases the potential for ministerial discretion in the allocation of funding.
	For example, why does Northumberland get nearly £100 per capita of grant more than Somerset? There may well be a perfectly legitimate reason, but the Government should be willing to make those reasons public and transparent and to debate them.
	Another side effect of this year's settlement is that, on the whole, districts have done better than expected. That may be a coincidence, but I cannot help wondering whether it has something to do with the Government's being desperate to avoid last summer's capping embarrassment, when they employed the full machinery of legislation to make an example of a set of tiny district councils, an example that for the most part provided little more benefit to the average council tax payer than the cost of a pint of beer.
	However, some developments are to be welcomed and it is important that we do so. As the Minister said, the Government have done much work to identify spending pressures with the LGA, and that is to be welcomed. We also welcome the shift toward three-year settlements, with the two-year settlement in this instance being fitted in with the three-year spending reviews.
	However, technical difficulties arise from a move to longer settlements. The Government will use projections from the 2004–05 mid-year population estimate to calculate funding through to 2007–08 and projections are, of course, based on historic trends, which poses problems for areas where population growth is speeding up, and for some northern cities, which have managed to stem population decline but where projections imply it is continuing.
	Fundamental questions also remain about the data source. The Office for National Statistics has finally admitted that, for many inner-London councils with high migration levels and very large ethnic minority communities, its population figures and methodology are fundamentally flawed. My own borough has battled with that. Brent council estimates that the ONS may underestimate its population by as many as 20,000 people, when compared with Greater London Assembly estimates. The implications are real, since for every 1,000 fewer individuals in the calculation, the estimated lost revenue approaches £500,000. Will the Government look at ways of ensuring that projections are informed by the most up-to-date data available?
	There are some glaring omissions in the statement. The Government have included no amount for the cost of their latest policy wheeze—council structural reorganisation—and I wonder whether the House should assume that that will not be implemented until 2008–09, or whether it is to go entirely unfunded? The Cambridge academic Michael Chisholm calculates that the cost will be up to £3.5 million. The Government may dispute the figure, but they surely do not claim that the process will be entirely free.
	The fundamental problem with the settlement, as with last year's and the year's before, is that it provides little freedom for councils to do their job properly. If we believe in local government, we have to give councils the freedom to raise and spend their own money. That means drastic local government financial reform, not a bit of tinkering with the formula.

Eric Illsley: I shall keep my remarks brief because many of the issues have been raised that I wanted to take up about metropolitan authorities. It has been a disappointing settlement for the metropolitan authorities, and that relates to damping. The met authorities are deeply disappointed by what appears to be the new settlement's lack of effective change. The authorities have received the lowest increase in grant; 2.4 per cent. compared with the national 3.1 per cent. For the metropolitan authorities, that equates to about £250 million. There are 17 met authorities that will have a floor increase of 2 per cent.
	The metropolitan authorities represent about 24.5 per cent. of national need. Their local tax base, unfortunately, allows them to deliver only about 22.2 per cent. of assumed local funding. That equates to 26 per cent. of total Government grant. That means that metropolitan authorities will receive only 27.3 per cent. of resources. That is a difference of £670 million to all the met authorities.
	The damping effect that will stem from the settlement is in addition to damping that has occurred in the past. In 2003–04, there were the changes to the education funding formula. Damping was introduced and met authorities lost an estimated £180 million. Changes were made to the funding formula of primary care trusts; again, that was in 2003–04, under the pace of change policy. That was £200 million less than the needs agreed by Government. As for joint funding issues, I was told on Friday that Barnsley PCT might now have to provide the funding to meet the debts of Sheffield PCT because of the political problems of our strategic health authorities. That would be a funding disaster for the area.
	Council tax revaluation, if delayed indefinitely, would have resulted in losses to metropolitan authorities. And so it goes on. The new social services formula builds on that. I shall give an example of how such damping has an effect on my area of Barnsley. There is the housing subsidy settlement of 2006–07. My area has suffered from poor housing subsidy settlements in the past. The formula did not reflect our need to spend. In 2004–05, the Government recognised this iniquity and introduced a new system of allowances. However, the pace of that change has been determined by the level of transitional protection to authorities, primarily in London, which were the losers following the 2004–05 changes. My local authority welcomed the 2006–07 draft settlement as it was proposed to move substantially towards our target allowances for housing subsidy.
	However, following consultation, additional transitional protection has been given and the top 16 gainers from that protection are all London authorities. As the national pot for management and maintenance allowances is fixed, money is being taken from authorities such as Barnsley to meet the cost of extra transitional protection for London authorities. My local authority is thus £350,000 worse off under the final settlement compared with the draft settlement.
	As my hon. Friend the Member for Wigan (Mr. Turner) pointed out, it is difficult for areas such as ours to make up any shortfall or address damping under the grant. We do not have wealthy local authorities. They do not receive income from tourism or charges for provision. We thus face pressure when trying to address the situation, which results in cuts to services because we cannot find the extra funding that we need. The authority will not challenge the capping rules set out by the Government, or implement way-out council tax increases, so services will be cut. I can tell my hon. Friend the Minister that redundancy notices were issued in the education department in Barnsley on Friday. Redundancies will occur because Barnsley will have to lose about 200 posts as a consequence of what the hon. Member for Brent, East (Sarah Teather) called an annual ritual. We face cuts and redundancies under our local government settlement, as we did in the bad old days of the previous Government.
	May I put forward a suggestion that has been made by the metropolitan authorities to try to resolve the damping situation in social services? It is proposed that an additional £305 million will be provided in 2006–07 and £508 million in 2007–08. Could £100 million of the 2007–08 settlement be brought forward to alleviate the effects of damping in the 2006–07 financial year? That would reduce the impact of the situation on social services and address the problems of four London authorities, 41 metropolitan districts, 22 county councils and 18 unitary authorities? A total of 85 authorities could benefit if £100 million were brought forward, and that would give them time to plan for the shortfall.
	As I pointed out, my local authority is once again facing cuts to services. We cannot find the funding to provide the services that are required of us with the grant that is being put forward, so we have to look at cuts, which is why redundancy notices are being served as I speak. In line with the representations that the Minister has received from the metropolitan authorities, will he remove the social services damping to some extent, fund the cost of the overall floors, implement a form of funding to take account of the effects of population decline and put in place a funding mechanism to compensate for the lack of revaluation?

David Curry: I know that the hon. Gentleman is under pressure, but as my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) pointed out from the Front Bench, we are quite a long way into a Labour Government. The formula has been changed about five times already. This is a Government who said that they were going to find a completely new way round local authority funding, and all they are doing at the moment is sitting there waiting for the Lyons report to come in, rather like Polynesian natives waiting for the cargo boat to arrive.
	Because education has done quite well, the rest of local government has done quite badly—we have to be honest about that. There are tough measures for social services, highways, waste and amenities, and that is accounting for the smoke and mirrors of the Gershon review. Curiously enough, the name "Gershon" did not pass the Minister's lips this evening.
	The third point, which in many ways is the most important of all, is that, on any reading of the Chancellor's expenditure plans, the future looks pretty tough for all areas other than his three, or two and a half, chosen special areas of health, education and overseas development. After the public expenditure boom, we are now heading for the bust. That means, inevitably, council tax will become much more acute as an issue, rather than less important.
	What has been happening. We now have two settlements. In fact, if one counts the police settlement separately, we have three. There is the revenue support grant and the dedicated schools grant, which flows from that debacle in 2003–04. The schools grant rises by 6.4 per cent. in 2006–07 and 6 per cent. the following year, and the grant for other council services rises by about 3 per cent. The schools money is based on existing expenditure—just 5 per cent. and a tiny bit more for London—plus an allocation by formula.
	What is interesting is that the Deputy Prime Minister has derided notional spending assessments, such as the standard spending assessments, because they are misused and people dare to extrapolate the level of council tax. Heaven forbid that we should dare to extrapolate by how much the Government might require councillors to increase their tax. All those have been dropped, but nobody has passed the message down the road to the Department for Education and Skills. Local authorities whose spending was below the schools' formula spending share will now get extra grant to enable them to move towards it.
	I suggest, if I may, that Ministers look back—I know that they constantly do so; the Minister for Local Government is always looking back—to see how their predecessors used to fulminate against need assessment. Lord Hattersley is a wonderful example of the fulmination against need assessment. Believe it or not, need assessment is now enthroned as the basic principle of local authority funding. But that has brought about what I regard as happy ironies. In 2003–04, my hon. Friend the Member for Brentwood and Ongar will remember, the Government were accused of manipulating the system to direct money towards their friends in the north. The fact is that because population has emerged as one of the few remaining quantitative elements in the determination of the grant, money is now moving back down from the friends in the north. The Minister, for once, is right for the wrong reasons: this is not manipulation in favour of Labour councils; in many ways, Labour councils will feel the pinch of this settlement rather more than other councils. All I can say is that that is ironic, and that it is nice to see the chickens coming home to roost.
	We now have a system with so many floors, ceilings and damping mechanisms that the whole thing looks rather like the design for the house of horrors in Hitchcock's "Psycho", and the Minister was rather like the corpse in the cellar, judging by the passion and enthusiasm that he put into his speech this afternoon.
	Where are we heading in the long term? The Institute for Fiscal Studies has calculated that the pre-Budget statement indicates a real increase in public expenditure between 2007–08 and 2010–11 of just 1.8 per cent. Once the Chancellor has made provision for his favoured services—health, education and international development—all the other services will have to fight over an increase of about 0.8 per cent. a year. That will include the bulk of the services that now fall under the revenue support grant.
	That means that council tax bills will rise, to the extent that they are permitted to do so under the capping procedures, and that there will be cuts in services. It is no good the Minister simply asserting blandly that there is no reason for anyone to cut anything. We all know that the inflation that affects local government services is entirely different from the broad, RPI-type of inflation, because so many local government services are demand led. So this will hit the services which, by their very nature, find it hardest to marshal a lobby. Social services tend to be fragmented because they involve a host of relatively small-scale support services for families, carers, elderly people and children, for which demography and social change are fuelling increases in demand. They will feel the pain, together with the smaller services that bear crucially on people's quality of life in their immediate environment.
	Of course a two-year settlement is welcome, because if councils can have nothing else, at least they can have a certain amount of predictability of their own misery. That will give them some assistance. No doubt, in two years, we shall have reached the Chancellor's next cycle of public expenditure, for whose review letters are now dropping into the postbags of the various Secretaries of State. Perhaps we shall also have received the long-delayed, much-deferred and much-hoped-for Lyons review.
	The Government talk incessantly about joined-up thinking, yet it is amazing how dislocated the whole process of the grant has become across the public services. Their motto seems to be: "Keep your heads down, chaps, and hope". The Minister made a speech today that put that into language, the poetry of which has entirely overwhelmed me. Local government is going to face some very difficult times.
	This is an inevitable settlement; there is no point in pretending that the Government are going to dish out a great deal more money. We all know that the chickens have come home to roost in regard to public expenditure. Local government had better batten down the hatches and prepare for some years of this, and council tax payers had better prepare themselves for council tax increases to go on rising steadily, because we are locked into this syndrome and there is no escape from it.
	The Government must regret some of the wonderful promises that they made in their early years about how they were going to introduce an entirely new structure in local government funding. It was as though they were just waiting to discover the north-west passage. As I have said before, we shall discover, unless Lyons proves to be a remarkably efficient icebreaker, that there is no such thing as a north-west passage in local government finance and that, for the time being, we are stuck with this.

David Clelland: I accept what my hon. Friend has said, and also what was said by my hon. Friend the Member for Wigan (Mr. Turner). At least local government settlements have gone the other way since 1997, and authorities have benefited from some improvements.
	My hon. Friend the Member for Wigan also spoke of inequalities in the system, and those are what concern us in the north-east. The system is based on a flawed formula: we know that, because the Government commissioned the Lyons report in an attempt to come up with a different system and a new formula. The north-east continues to come out worst whenever a settlement is announced. This year the Minister has announced an average settlement of 3 per cent.; the average settlement in the north-east is 2.7 per cent. Along with that, we have to compete with our next-door neighbours in Scotland, who benefit from the Barnett formula. It is somewhat ironic that the Federation of Small Businesses in Scotland produced a report today showing that the north-east of England is at the bottom of the league according to a series of key social indicators, while in most instances Scotland is above the average.
	The Minister has announced a 3 to 3.5 per cent. increase, but Gateshead in the north-east has ended up with 2.5 per cent., even less than the north-east average—although according to all the indicators it needs support from central Government, and although it is a beacon council that the Government constantly cite as an example of good local government. Westminster, with all its high-value properties and high incomes and all the advantages of the lucrative business that surrounds it, has received an increase of 2.9 per cent. that is set to rise to 4.6 per cent. next year. Gateshead's increase is set to rise to only 2.7 per cent. How can that possibly be equitable or right?
	Ministers have tried to resolve some of the problems. They have made adjustments in an attempt to iron out some of the anomalies. As the settlement demonstrates, however, the inequities have not been removed. I believe that that is because Ministers have found the system to be so skewed that ironing out the unfairnesses in one fell swoop would require a huge shift of resources from authorities that were favoured under Tory Governments in the past, with all the political consequences that would ensue.
	Ministers have therefore introduced what my hon. Friend the Member for Wigan describes as damping. The aim was to avoid the political fallout, but it also means that the full benefits of a fairer system, and of the changes that Governments have made, are not passed on to the local authorities that need them most. It is estimated that that has cost metropolitan authorities £250 million in social services funding alone, and a further £180 million has been lost to metropolitan education services.
	Those inequalities have been further aggravated by a new factor in the formula: households with residents aged over 90. Unfortunately, the north-east is very low down in the league when it comes to health inequalities, and few of our households contain residents over the age of 90. We therefore cannot benefit from that change in the grant, but our old people still need support. Indeed, they may need even more support because of the health equalities to which I have referred.
	Young people are also affected. After all that the Government have said about "Every Child Matters", how can it be right for councils in London to receive up to three times more for each child than those in the north-east? What possible justification can there be for that?
	The right hon. Member for Skipton and Ripon mentioned the population issue. It is a key factor in grant distribution, but it too can work to the disadvantage of the areas in greatest need. If half the people move out of a street, we do not see half the paving stones being removed or half the street lights being turned off. The same services must be provided, even if the population has been halved. Falling populations are tied too closely to the allocation of resources, and too little consideration is given to the continuing need for services even when a population is in decline. Indeed, the need may be greater in such circumstances: it is often the economically active and the skilled workers who depart, leaving behind vulnerable people who require even more support.
	The projected figures show that the population in the north-east is actually rising by 2,000 a year, but according to figures from the Office for National Statistics—as was acknowledged earlier, they are incorrect—the population is falling. So as a result of the population factor, we are suffering yet again in terms of grant allocation.
	The other issue, which I am afraid the Government have ducked, is revaluation. Revaluation is important in an area such as mine. Ministers often talk about the difficulties of being in government—about how being in government is about making tough decisions and not being afraid to make unpopular decisions—but they backed away from revaluation only too quickly.
	The Minister mentioned the free bus travel scheme that is due to be introduced in April—an issue that I have raised in the House several times. The Chancellor of the Exchequer announced a £350 million fund to pay for the scheme and by all accounts, that should be enough money to finance a free bus fare system across the country. However, some genius decided that the money should be distributed through the revenue support grant system, which is in no way related to the specific issue of the concessionary fare-travelling public. I do not know which civil servant made the suggestion or which Minister took that advice, but both should be surplus to requirements. The result was that this issue got lost in the system, and areas such as Tyne and Wear, where the population is relatively low but the use of public transport and concessionary travel is relatively high, therefore lost out. However, areas with greater car ownership—where more people travel by car and fewer travel by public transport—got more money than they need to run free bus services. Tyne and Wear ended up with £7.5 million less than it needs to run the scheme.
	I have raised this issue with the Minister in the past few months and to be fair to him, he has listened carefully and done the best that he can to resolve it; however, it has not been resolved. He referred earlier to the extra £1.7 million that Tyne and Wear has been allocated by the Department for Transport, which will help to provide free fares on the metro light rail system. We cannot have free fares on buses and not on the metro, because if we did, the metro would suffer a loss as a result of people switching to the buses. Secondly, a lot of people, particularly in the east end of Newcastle, rely on the metro rather than the buses, so it would be unfair to them if they had to pay and others did not; the situation has to be equal.
	So funding free travel on the metro cost £1.7 million, but we are still more than £5 million short of the money needed to run the free bus service. That means that at next Wednesday's budget meeting, the passenger transport authority will have to cut concessionary fares for young people generally, and specifically concessionary fares for those attending college. I have been a Member of this House for 20 years and a public representative for some 34 years. I do not know how many advice surgeries I have run in that time, but it is certainly a lot. Last Saturday, for the first time ever, at two separate advice surgeries two completely different representations were made on the same issue by people who were completely unconnected. They were pensioners, and they told me that they did not want something that the Government were going to provide: they did not want free bus travel in Tyne and Wear to be provided at the expense of concessionary fares for young people. However, this is what we are having to do, because the Government have failed to resolve this issue.
	I appreciate what the Minister said about the legal problems that the Office of the Deputy Prime Minister faces in trying to dish out money to different local authorities. I said some time ago that if Ministers cannot resolve this issue, we will ask the Prime Minister to do so. He has responsibility across the whole of government, and not just for one Department. But I am now told that I cannot speak to the Prime Minister because discussions are ongoing. Well, I hope that the Minister can resolve this issue, because so far as I am aware, discussions that might resolve it are not in fact ongoing. The ODPM has given us the definite answer that no further money will be forthcoming. The problem therefore remains, so I hope that the Minister will unblock the situation and allow us to have our meeting with the Prime Minister.
	The Government hope that the Lyons review will point the way in solving the problems associated with local government finance. However, there is absolutely no way that any review can come up with a solution that will produce a fair system that does not involve a massive shift in resources between regions, nations and local authorities—that is unless the Government provide huge extra resources to correct the anomalies that have been allowed to build up.
	I await with interest the outcome of the Lyons review, but I am not optimistic that Ministers of any Government will ever have the guts to do the right thing.

Michael Jabez Foster: It is not new for East Sussex county council to whinge; it does so annually. Indeed, back in the 1970s I took part in the whingeing, although then we had some cause. In the four years to 1997, our real-terms funding was minus 7 per cent., and that included education. There is a history—and that situation occurred not long ago. Even more recently, at the general election, the Opposition offered us a zero increase in local government funding. If that had come about, we should be experiencing real problems.
	This year, East Sussex county council received an extremely good education settlement—and not minus 7 per cent., but a 2.1 per cent. funding increase, to deal with everything else. As the hon. Member for Brentwood and Ongar (Mr. Pickles) pointed out, the council's Tory leadership suggests that the increase was only 0.6 per cent. That is wrong. Let us at least get the facts correct: it was 2.1 per cent., more or less in line with inflation.Given such an increase, it is shameful that the council is trying to destroy many important local government services, especially social services. I am grateful to the hon. Member for Brentwood and Ongar for mentioning that the only day-care centre in Rye for older people is to be closed.
	I am honoured to be president of the local branch of Mencap, but funding for its active art provision for about 60 adults with learning difficulties is to be completely withdrawn. One of the cruellest cuts of all will affect Rethink SOS, which helps people in the first weeks after they have attempted suicide. As far as the service is aware, no one has tried to take their life again. That may be luck, but the service has been vital, and its funding, too, will go completely. Furthermore, £500,000 is to be withdrawn from care for carers. The Government may have made a mistake in not ring-fencing the care grant, as they originally proposed, because the Tory council is now able to cut it, as well as funding for respite care. That shows what caring Conservatism means in East Sussex. At least we have a test bed—we know what Tories do when given the opportunity—so that will be a lesson, despite what the new leadership suggests.
	Such things might have been necessary if the funding had been cut, but with an inflation increase in grant and a double-inflation increase in the council tax proposed, they are simply unnecessary. None the less, is 2.1 per cent. enough? Cuts are not necessary this year, because the county council can look to balances and other funds, but I have to tell my hon. Friend the Minister that in the longer term, it would not be possible to maintain such services if an increase of 2.1 per cent., covering inflation only, were provided.
	The reason is very obvious. East Sussex has a growing elderly population—many people are over 85 years of age—and the formula is flawed. The Minister well knows about that, because he has been gracious enough to listen to the arguments made by East Sussex county council—or perhaps he did not quite hear them, but he certainly listened to them—and there is certainly a need for additional funding for people over 85. That is very important, but it has not been fully taken into account.
	Moreover, East Sussex has particular needs because of the cost of labour. We are just outside the home counties, but we compete with them for labour. My hon. Friend will say that the area cost adjustment has been spread, thus making it fairer, but it does not feel like that in East Sussex; the truth is that the current formulation of the ACA allows counties way outside the London area to benefit, and we lose out.

David Howarth: I want to raise two topics with the Minister: first, the supporting people programme, the grant for which has fallen by 1.7 per cent. nationally; and, secondly, the transparency and rationality of the grant formula.
	As the hon. Member for Brentwood and Ongar (Mr. Pickles) said, the supporting people programme is admirable. Its aim is to help people to live independent lives at home. They include those who have been homeless and rough sleepers, ex-offenders, people with disabilities, people at risk of domestic violence and people with drug and alcohol problems, as well as several other vulnerable groups such as Travellers and people with HIV and AIDS. The programme provides funds in order to, for example, help people to access their correct benefit, ensure that they have the right life skills to maintain tenancies and provide advice on home security. Finding a place for someone to live is often not enough: unless they are given help in maintaining a new and stable lifestyle, they may be in danger of slipping back into their former lives.
	The problem is that funding for the supporting people programme was cut last year, is being cut this year and looks as though it will be cut again next year. The origins of the cuts lie in the Treasury's belief that the programme is too expensive. However, the cost to the public purse, through the health service, the criminal justice system and the benefits system, of failing to reintegrate vulnerable people is also very high.
	I understand that the Government are consulting about the future of the supporting people programme, and I hope that they will decide to give it the funding that it deserves. I have two comments for Ministers to consider in the course of that consultation. First, as the hon. Member for Wigan (Mr. Turner), said, there is an interaction with health spending. That is particularly true of mental health spending. There is a serious problem with the provision of mental health services in many areas. In my own constituency, cuts of 13 per cent. in mental health funding have been proposed. Some of those cuts—to day centres, for example—affect precisely the same people as cuts to the supporting people programme. All I ask is that the Department of Health and the Office of the Deputy Prime Minister work together to ensure that these most vulnerable people are not hit twice by separate Government policies.
	Secondly, there is an interaction with spending on homelessness. I note from the figures before us that the special grant for tackling homelessness is rising just as the special grant for the supporting people programme is falling. That rise is welcome in itself, but Ministers should remember that the homeless are among the most important of the groups that are helped by the supporting people programme. I would like an assurance from the Government that they are not merely shifting resources around from long-term help in supporting people to short-term help for the homeless. The supporting people programme is a crucial part of dealing with homelessness. The policy of moving people through gradations of housing until they are able fully to support themselves is absolutely right, but it will not work unless people are helped to stabilise their lives. Emergency services for the homeless usually win more headlines, but long-term success depends on such programmes, and they need to be maintained.
	The other issue that I want to raise is that of the lack of transparency in the system of calculating grants for local authorities. In December, the Minister said that the settlement was purely cash-based and did not involve any assumed council tax levels for each authority, as in the past. That caused much amusement in local authority circles. No system for the allocation of grant to local government can be purely cash-based, because all systems start with the national control total and work backwards. The formula is a way of distributing a fixed budget. Anything else would cause chaos in central Government finances. If one proceeds as the Government have, all that one does to get the figures to add up is to introduce a bit of trial and error by running the formula repeatedly, using slightly different figures, until the right totals appear.
	The Government's purpose in shifting to the new system appears to be purely to avoid having to publish the assumed council tax figures for each local authority. They complained that the figures were misunderstood and that local authorities were using them for inappropriate purposes. The Minister mentioned standard spending assessments, which were misused. That is true but they were mainly misused by central Government. The SSA constituted a method of working out the share of the national total but it was used to criticise local government for spending too much or too little.
	It was the other way around with assumed council tax. The assumptions were understood only too well and the Government appeared desperate to disguise them. To do that, they produced a system that is, according to the Chartered Institute of Public Finance and Accountancy, more complex and much less transparent than the previous system. However, it is not clear that the Government have even succeeded in hiding their assumptions about council tax amounts and the way in which they calculated the figures. Finance officers in councils throughout the country are busy working out what the Government's assumed council tax for their council must have been.

David Amess: We live in an unjust country. The Government are unjust and I blame local government's powerless state on the Labour leader. Since he took power in 1997, he has shown little or no interest in local government.
	What is the point of anyone becoming a councillor nowadays? The centralising Government tell local authorities everything that they should to do. They tell them how much to spend and what they can raise. Central Government direct every facet of local government. What on earth is the purpose of anyone standing for local government?
	A deputation from Southend council met the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick) last month to explain to the Government Southend's serious financial predicament and to try to get more help from him. As the Minister knows, when the national census was conducted, 20,000 people in Southend were left off it. That means funding for 20,000 fewer people. The Minister is always courteous when he meets us and has been sympathetic, but my colleagues and I are not going to shut up and wait until 2011 for something to be done.

Andrew Pelling: I shall keep my remarks short as I know that the Minister wants to reply.
	Despite what the Minister had to say, quite a few Opposition Members have spoken on behalf of authorities whose allocation of moneys is on the floor. I should not want to cut across what the hon. Members for Wigan (Mr. Turner) and for Barnsley, Central (Mr. Illsley) had to say, but I assure the House that in London, having a social services grant on the floor does not necessarily mean living a life of luxury. Within my local authority there is, unfortunately, a need to close down an industrial organization that has given jobs to 85 disabled members of the community. There has also been the acceleration of closures of old people's homes. The Minister and my hon. Friend the Member for Mole Valley (Sir Paul Beresford) raised the issue of affordability. That is an important issue, especially within the context of London.
	Within my constituency, there was a recent analysis by Barclay's that showed that the real standard of living, when account is taken of the costs of living in London, in Croydon, Central is within the bottom 100 constituencies in England and Wales. The neighbouring constituency of Croydon, North is within the bottom 30. Careful consideration must be given to the allocation of moneys to constituencies in outer London, which are showing great signs of a decline in the quality of public infrastructure. That is recognized by the Mayor of London.
	Within Croydon, there are real issues with specific grants that go into the overall revenue settlement; for example, concessionary fares and importantly, for Croydon and Hillingdon, unaccompanied asylum-seeker youngsters.
	Briefly, I pay tribute to the London borough of Sutton, which is controlled by the Liberal Democrats. There is a desire there to work on a cross-party basis to lobby on behalf of that borough's interests. The approach taken was a great success for the borough in terms of achieving its position in the area cost adjustment in falling within a west London council definition. Unfortunately, the London borough of Croydon has not fallen within that process. If I had some criticism of the Labour authority in Croydon, it would be its unwillingness to operate in a bipartisan approach to the Minister that involves both the Labour and Conservative parties. That is both before my election to the House and afterwards.
	I suppose that, on a party-political point, that will not be a problem for me after the coming local elections. However, it is important to take a constructive approach. When it comes to area cost adjustment in terms of west London councils on the provision of education, children's services and other elements within cost adjustment, we find that the boroughs are being funded at a rate of 6 per cent. higher than other boroughs within outer London. It strikes me that that is an unjustifiable effect of the operation of the ACA within the funding formula.
	Overall, it will have cost Croydon council £40 million relatively in funding over the three-year fixed period that has been locked in by the Government. There seems also to be a contradiction in funding within London on schools. The average funding for secondary schools within Croydon is £3,300 per pupil whereas in many London boroughs the funding will be £5,000.
	I concede that there have been problems within Croydon given its fascination for council tax referendums that allowed the opportunity for increases of 2 and 3 per cent. in the run-up to the previous local elections. Obviously that led to a great deal of trouble for the local authority in increasing its council tax by 27 per cent. immediately after the local council elections. Unfortunately, that will operate as a distinct handicap for the Labour party in trying to retain control of Croydon council at the upcoming elections. The residents of Croydon will easily remember 27 per cent.
	Croydon is going through dynamic change. Many of the wards within Croydon have the highest populations of black and ethnic minority communities, and it is important that we serve those communities. The political agenda within London, understandably within the context of the Olympics and London 2012, has been to concentrate resources on the development of the Thames Gateway area.
	Funding that comes to London through learning and skills councils also discriminates strongly against southern London. In the review of area cost adjustment for subsequent years, I hope that the Minister will give serious consideration to the need to take account of the real costs of operating in London. Boroughs such as the London borough of Croydon require greater equality of treatment. The director of finance of the London borough of Croydon recently said that we operated within an ACA that put us in a valley of payments, or low point, compared with neighbouring Bromley and Sutton.
	Serious consideration should be given to the real dynamic changes that are taking place in Croydon's population. As many other hon. Members said, especially the hon. Member for Hastings and Rye (Michael Jabez Foster), we must realise the problems that are caused when areas with distinct deprivation are not well supported through the overall allocations. That problem applies especially to the London borough of Croydon because its northern parts and some areas of Croydon, Central, which I represent, have many facets and styles that are similar to those of inner-London areas.
	Unfortunately, as the Minister will be aware, there was recently a great deal of publicity about the fact that our main station in Croydon has the highest rate of reported crime of any outer-London rail station. That in itself is an indication of the some of the decline that has taken place in the London borough of Croydon, which ought to be addressed through the future allocations of resources to Croydon. When the Minister winds up the debate, I hope that he will provide us with some positive remarks about how the area cost adjustment for Croydon will be reviewed in future years.

Phil Woolas: With the leave of the House, I shall reply to the debate.
	I thank hon. Members on both sides of the House for their contributions to the debate and will try to respond to their points about the settlement. Over the past few weeks, I have been keeping a private tally of the most ingenious arguments that hon. Members have made for why their constituencies are being unfairly treated and good contributions to that competition were made this evening. Hon. Members representing some of the wealthiest areas in the country said that they should be rewarded for living in wealthy areas. Conservative Members said that money is being given to northern Labour areas, while we heard from Labour Members representing northern areas that money is being given to southern Conservative areas; I make no comment about that.
	The winner of the competition has to be the hon. Member for Southend, West (Mr. Amess), who complained that the delegation that he led to meet Ministers from the Office of the Deputy Prime Minister resulted in a reduction in his area's grant. I am highly tempted to save that one until the next general election and put out a performance review grant. Unfortunately the hon. Gentleman is not in the Chamber, but the truth is that the reason for the changes was entirely due to statistics. I am well aware of Southend's difficulties due to the fire at its pier and have previously commended the hon. Gentleman on his campaign about population statistics. I referred to that general issue during my opening remarks when I said that the Government rely on the most robust figures available, which are those from the Office for National Statistics.
	The hon. Gentleman also criticised the Government for using historical trend population figures. May I re-emphasise the fact that the changes that we have made in the settlement take account of future projections, as well as historical changes, to take on board points made by hon. Members on both sides of the House during the consultation and recent meetings?
	The hon. Member for Southend, West said that his council was implementing cuts of £11 million. I wonder why Opposition Members have such short memories. A cut is a reduction in the cash available to spend on services; a cash reduction or a reduction after inflation, if one wants to define it like that. A cut is not a smaller increase than was hoped for. [Interruption.] Opposition Members, who are incredulous at that point, need to get back to the days when they were a party of sound finances. It is not credible to stand before the electorate in May, in the context of increased grants from the Government year on year, over 10 years, and complain about cuts. That is just not tenable.
	That is not to say, as I said in my opening remarks, that the Government have not recognised that there are pressures on councils, particularly as a result of an increasing elderly population, increases in the costs of waste recycling and increases in other areas, above the net new burdens identified by the Local Government Association and ourselves, which were provided for in this settlement. Opposition Members cannot have it both ways. They cannot say that the reductions in services in some specific areas of council expenditure are due to this settlement; they are not, and it is not credible for them to argue that point.

Mr. Deputy Speaker: Order. The hon. Lady must sit down. Remarks such as those that the hon. Gentleman just made are generally disapproved of. This is an Adjournment debate—the personal property of the Member who has raised it—and it entitles the hon. Lady to a ministerial response; it is not an occasion for party political matters. Whatever the content of the speech, it is the hon. Lady's and the presence of other hon. Members in this House is an irrelevancy.

Natascha Engel: Thank you, Mr. Deputy Speaker.
	I cannot understand the massive lack of ambition that leads to a local council closing a swimming pool shortly after the announcement that we will be hosting the Olympics and Paralympics. What message does that send to local people in Staveley and Chesterfield? The UK's Sydney Paralympics swimming team came home with 62 medals—out of a total of 131 medals awarded. We in North-East Derbyshire want to build on that record. We want to encourage able-bodied and disabled children to be the swimmers and winners of 2012, but how can we even think of competing if Chesterfield is to close its swimming baths?
	It is not as if Chesterfield is flooded with pools. Once Middlecroft is closed there will be only one other pool in the borough, and that is already heavily oversubscribed. We should contrast this approach with that of North East Derbyshire district council, which manages four 25 m pools and plans to upgrade them, rather than to close them.
	However, the context of this debate is wider than my constituency and Chesterfield: it is about health, wealth, leisure and community. As Duncan Goodhew says:
	"Swimming is the best all-round sport for our health. It is the least discriminating, certainly in age and ability and it has the highest appeal in the nation."
	He is not joking. More than 22 per cent. of the nation swims at least once a month. It is the single most popular sport in the country. When Tessa Jowell, the Secretary of State for Culture, Media and Sport, visited a school last week and asked the children—